Powernet targets RM1bil order book in 6 months


  • Corporate News
  • Friday, 29 Nov 2019

Powernet group managing director Mustakim Mat Nun said the company would be changing its business focus to the energy, utilities as well as infrastructure sectors in the coming years.

kUALA LUMPUR: Kumpulan Powernet Bhd is targeting to increase its order book to RM1bil in six months after securing its first major project under the new management led by businessman Datuk Mohd Abdul Karim Abdullah.

The company announced that it has won RM254mil contracts for the construction of sewage treatment facilities and a 12-floor green building index certified building.

Powernet group managing director Mustakim Mat Nun said the company would be changing its business focus to the energy, utilities as well as infrastructure sectors in the coming years.

“These are new growth areas that we are exploring. We are working to improve the company’s profitability by next year, ” he told reporters after the group’s EGM yesterday.

Powernet recently returned to the black in the first quarter ended Sept 30 after reporting losses for almost nine years.

Previously, the company’s main businesses were in textile manufacturing, property development and property investment.

Powernet recently saw the emergence of Karim, who is the founder of Serba Dinamik Holdings Bhd, with other parties acting in concert to buy more than a 50% stake in the company.

Karim’s flagship company Serba Dinamik is one of the dominant oil and gas players in the region.

He has almost 24% in Serba Dinamik, with his stake being valued at RM1.54bil.

Serba Dinamik’s share price has been on the uptrend, rising more than 200% over the last five years.

Karim, who is also the chairman of Powernet, said aside from new businesses, the company is also looking to divest some of its assets, including its property investment in student accommodation in Liverpool, England. The asset was valued at RM8.27mil as of June 27,2018.“We are in the midst of a turnaround. Our aim is to ensure the company remains sustainable and that the projects we secure must have a fast rate of return.

“The divestment of our asset in Liverpool would unlock some capital for Powernet to venture into new areas, ” Karim said.

Notably, at the EGM yesterday, Powernet received shareholder approval to enter into recurrent related-party transactions with related parties that it deems necessary for its day-to-day operations and to support the growth of its order book growth.

Mustakim said the related parties include OHP Group, a green power technology company which he has a 51% stake in, as well as Karim’s Serba Dinamik.

He said there would be no new asset injection into Powernet in the near term, but that the bidding process and the exploration of new opportunities would be through Powernet, Serba Dinamik and OHP.

He pointed out that Powernet would also be looking at a potential fund-raising exercise both from the equity and debt markets to fund the group’s next phase of growth.

Powernet has also announced a new dividend policy, where it aims for a payout ratio of 20% of consolidated profit after tax for each financial year beginning financial year 2020 (FY20).

In June, StarBiz first reported that the 54-year-old Karim and his business partner had acquired a combined 30% equity interest in Powernet from substantial shareholders SSF Home Builder Sdn Bhd and Datuk Lee Chong Hoon – the brother of national badminton hero Datuk Lee Chong Wei.

The deal was done via off-market transactions.

Karim then extended his offer to buy out all the remaining shareholders in the company at RM1 a share due to a mandatory general takeover.

For FY19 ended June 30, the company was back in the black with a net profit of RM476,000 from a previous loss of RM5mil. Revenue increased to RM13.24mil from RM5.73mil previously.

In its first quarter, Powernet posted a net profit of RM948,000 compared to a loss of RM328,000 a year ago, as revenue jumped more than seven times to RM11.16mil from RM1.46mil a year ago.


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Powernet , Serba Dinamik , Karim , order book , energy , oil , gas ,

   

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