Better times ahead for KNM
KUALA LUMPUR: KNM Group Bhd
's United Kingdom unit Peterborough Green Energy Ltd has awarded a £346mil (RM1.9bil) contract to a China Western Power Industrial Co. Ltd to build a energy-from-waste power plant.
KNM said on Tuesday Peterborough Green Energy had inked the engineering, procurement, construction and commissioning (EPCC) contract with China Western Power on a deferred payment scheme.
“The EPCC contract pertains to the erection of a net 36MW energy from waste power plant for its Peterborough Green Energy Project in UK for a period of 37 months from the commencement date of the construction, which is expected to commence in the first quarter of 2018,” it said.
KNM's core business involves process equipment manufacturing, provision of integrated solutions, project management, engineering and construction services for the renewable energy, power, utilities, refining and petrochemical industries.
As for China Western Power, which was incororated in the UK, is listed on the Shenzen Stock Exchange.
China Western Power is involved in manufacturing and exporting large scale boilers, auxillary equipment. It is an EPCC service provider for energy and power stations. It also has investments into waste treatment facilities in China.
KNM expects the project is expected to yield positive returns in line with its long term strategic direction of generating sustainable and recurring income streams from its renewable energy businesses.
It expects the project to provide recurring income in the near future as it seeks to turn its fortunes around.
Once the Peterborough Green Energy plant is complete, KNM would see most of its income from a recurring base.
“We are transforming. When the UK project starts we will derive 70% of our revenues from recurring incomes,” it’s CEO Lee Swee Eng told a press conference.
The company’s orderbook currently stands at RM2bil to RM2.5bil that will enable it to last up to two years.
“At least in terms of our earnings we will be cushioned with the recurring income and we won’t be subject to these roller coasters based on the oil price,” he said.
"We have to use a different method to value this company in the future because we are no longer relying much on orderbook anymore for our income,” he added.
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