PETALING JAYA: Maybank Investment Bank Research (Maybank IB) has upgraded Ranhill Utilities Bhd
to a “hold” after its 80%-owned unit, Johor state water operator Ranhill SAJ Sdn Bhd (RSAJ), raised water tariffs.
Effective Aug 1, RSAJ raised tariffs – particularly for non-domestic users – with the rate for usage below 35 cubic m (m³) increased to RM4.15/m³ from RM3.15/m³, and above 35 m³ to RM5.30/m³ from RM3.55/m³.
Tariffs for the shipping segment were raised to RM8.03/m³ from RM7.05/m³, and a new data centre category has been introduced at RM5.33/m³.
Domestic tariffs were largely unchanged, except for consumption above 35 m³, which saw a smaller hike from RM3.15/m³ to RM3.50/m³.
Maybank IB noted that RSAJ’s previous tariff revision in 2023 only saw a 30 sen/m³ increase for the below-35 m³ band (non-domestic users), compared to the RM1/m³ hike this time.
“By our estimates, every 10 sen/m³ increase in average non-domestic tariff would raise annual net profit by RM15mil.”
It also said the tariff hike provides RSAJ with a financial buffer to cope with “escalating” lease payments to Pengurusan Aset Air Bhd, although the total amount of these payments was not disclosed.
“However, the ad hoc timing of the hike suggests the water industry’s transition to a more robust tariff framework (such as that of electricity and gas) remains some time away,” it cautioned.
