Malakoff Q1 net profit drops to RM52.9mil

Malakoff, which is an independent power producer with the largest capacity in Southeast Asia, announced to Bursa Malaysia its indirect unit Win Macarthur Finco Pty Ltd (WMFPL) had drawn down the amount for the existing term loan.

KUALA LUMPUR: Malakoff Corp Bhd’s net profit fell 46.4% to RM52.9mil in the first quarter ended March 31, 2018 compared with RM98.8mil posted a year ago.

In a filing with Bursa Malaysia, Malakoff said the group recorded lower profit before taxation of RM97mil compared with RM174.7mil last year, primarily attributed to lower contribution from Segari Energy Ventures (SEV)  following the reduction in tariff under the extended power purchase agreement (PPA) effective from July 1, 2017  as well as lower fuel margin recorded at Tanjung Bin Power Sdn Bhd and Tanjung Bin Energy Sdn Bhd coal plants.

However, these were partially moderated by lower operation and maintenance costs, lower depreciation of C-inspection costs following revision in the useful lives of C-inspection for gas plants in view of the anticipated lower dispatch as PPA expiry date draws closer and lower finance costs upon settlement of Junior EBL in the corresponding quarter.

Its revenue for the quarter was lower at RM1.6bil against RM1.78bil previously. 

Commenting on its prospects, Malakoff said the group remained positive on the overall outlook for 2018 in line with the expected growth rate of 2% per annum in the nation’s power demand. 

“The group is expected to benefit from the positive recovery of Tanjung Bin Energy power plant which is expected to receive normalised capacity payment from the second quarter 2018 onwards.

“The group is intensifying its effort to expand into renewable energy (RE) opportunities in tandem with the Government’s aspiration to reduce carbon emissions by 40% in 2050,” Malakoff said in the notes accompanying its financial results.