In a filing with Bursa Malaysia, the environmental services provider said the DoE informed the company of its decision in a letter dated Oct 13, 2015.
Picorp’s unit Alam Sekitar Malaysia Bhd’s (Asma) 20-year concession ended in April this year but the Government awarded it a one-year extension.
Following the failure in the request for proposals tender process, Picorp said Asma would cease to generate revenue from the interim agreement after April 13, 2016, unless the Government granted a further extension.
Picorp said upon the expiry, the company’s earnings per share (EPS) and net assets per share for the financial year ending Dec 31, 2016, were expected to fall by 0.27 sen and two sen, respectively, from the 2014 financial year.
To recap, Asma was awarded a 20-year concession in April 1995 under the privatisation of the DOE’s environmental monitoring and data management activities.
Asma had, among others, the exclusive right to operate the manual ambient monitoring programme for 20 years from April 14, 1995, and the Government had an option to extend it for an additional five years.
Under the interim deal signed in April this year, Asma was given a one-year exclusive right to operate the continuous ambient monitoring programme, which included operating the existing air quality and water quality monitoring stations.
The Government had announced that it would adopt a similar Air Pollutant Index measurement as Singapore and planned to upgrade its 52 air quality monitoring stations so all could measure fine dust measuring 2.5 microns (PM2.5) within the next two years.
In the first half-year ended June 30, 2015, the company posted earnings of RM4.946mil, up 77.5% from the corresponding period last year (EPS of 75 sen compared with 42 sen previously).
For the second quarter, the environmental consulting and engineering segment, which includes Asma’s operations, contributed 45% of the company’s revenue.
Picorp shares shed one sen to close at 24 sen on Thursday, with 1.11 million shares changing hands.