KUALA LUMPUR (July 29): Engineering and energy solutions provider Kejuruteraan Asastera Bhd (KAB) is eyeing higher revenue contributions from its sustainable energy solutions (SES) segment, after successfully completing the acquisition of its first mini hydropower plant in North Sumatera, Indonesia.
The concession for the Kombih III mini hydropower plant is expected to generate at least RM270 million for the group over the concession period of 20 years, the electrical and mechanical engineering service provider said in a statement.
On Friday (July 29), KAB announced that its wholly-owned subsidiary KAB Energy Holdings Sdn Bhd (Kabeh) has inked a share sale agreement with Sarawak Cable Bhd to acquire the entire issued share capital of the latter’s subsidiary PT Inpola Mitra Elektrindo (PT IME) for RM10,000 in cash.
In addition to the share sale agreement, PT IME will be released from all liabilities and encumbrances upon full settlement of the purchase consideration and outstanding debt of up to RM75 million.
PT IME owns and operates the Kombih III mini hydro power plant in North Sumatera, Indonesia, which commenced commercial operations in October 2021 with 11-megawatt installed capacity.
On top of that, PT IME is supplying electricity to Indonesia’s state-owned utility company PT Perusahaan Listrik Negara for the 20-year concession period.
Prior to acquiring the mini hydro power plant, KAB’s SES segment derived its revenue from various renewable and clean energy projects in Malaysia and Thailand, comprising solar photovoltaic systems, co-generation facility and waste-to-heat recovery systems.
The group’s SES segment made up RM6.8 million or 3.9% of KAB’s total revenue of RM174.44 million for the financial year ended Dec 31, 2021 (FY2021). The segment’s contribution increased to 7.6% or RM4 million for KAB’s revenue of RM52.98 million in its first quarter ended March 31, 2022 alone, and is anticipated to rise further.
“With the hydropower plant in place, KAB’s revenue from the SES segment is set to double in this financial year ending Dec 31, 2022, compared with FY2021,” said KAB managing director Datuk Lai Keng Onn.
The SES segment has a current orderbook of RM480.6 million.
KAB’s shares price closed unchanged at 41 sen, giving it a market capitalisation of RM741 million.