PBA share price up on news Penang plans water tariff hike

PETALING JAYA: Penang state water operator PBA Holdings Bhd’s share price surged to its intra-day high of RM1.39 yesterday, following news that the state government was mulling a water tariff hike in the state to curb rising demand.

PBA was one of the top gainers yesterday, closing 18 sen higher to RM1.36, its highest since 2007. It was actively traded, with 7.1 million shares being done.

Analysts said PBA was, without a doubt, the biggest beneficiary should Penang increase its water tariffs. They said any further excitement arising from the tariff hike would be a catalyst to the company’s share price.

On Thursday, The Star had reported that the Penang government was planning to raise water tariffs, and that the last tariff revision was 23 years ago.

Penang Chief Minister Lim Guan Eng was quoted as saying that a hike in the tariff rates was inevitable. “I cannot disclose when the hike will take place, as studies need to be done.”

Lim said even with the hike, the water tariff in Penang would still be the cheapest in the country.

He said the Penang Water Supply Corp Sdn Bhd had requested permission to actively study the increase in water tariffs, to which the state government had agreed.

Lim said the water consumption in Penang was the highest in the country at 295 cu litres per person per day last year, followed by Perlis (241 litres), Labuan (240 litres) and Perak (238 litres).

However, for the first two months of this year, the water consumption in Penang had increased to 311 cu litres per person per day.

For the full year ended Dec 31, 2013, PBA posted a net profit of RM27.9mil on revenue of RM251.6mil.