Malakoff sees Alam Flora contributing 25% or more to net profits

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

KUALA LUMPUR: Malakoff Corporation Bhd expects its purchase of Alam Flora Sdn Bhd for RM944.61mil cash consideration will contribute 25% or more to the net profits in the future.

It said on Thursday Alam Flora group’s solid waste management business provides it with another stream of stable income and diversify its earnings base as part of a longer term plan to move the company forward in the concession-based essential services business in Malaysia

The independent power producer made its foray into the power generation from solid waste with the purchase of 97.37% stake in Alam Flora Sdn Bhd from Hicom Holdings Bhd, a unit of DRB-Hicom Bhd.

“The board believes the proposed acquisition offers synergistic benefits to both Malakoff group and Alam Flora group,” it said.

Currently, Malakoff’s exposure to the renewable energy generation sector is via its stake in a joint venture that owns the 420MW Macarthur Wind Farm in Victoria, Australia. 

“In the longer term, there will be opportunities to integrate the businesses of Malakoff Group and Alam Flora group and leverage on their shared expertise, services and resources to develop waste-to-energy (WTE) projects,” it said.

Malakoff said the move would ensure the security of supply of waste from the operations of Alam Flora Group as a resource for Malakoff’s power generation activities. 

It added if Malaysia continues with waste generation in a business-as-usual manner, and taking population and economic growth into account, the country would need to look beyond waste disposal and landfills towards more sustainable waste management.