KUALA LUMPUR (May 30): Citaglobal Bhd, formerly known as WZ Satu Bhd, expects a return to growth in the financial year ending Dec 31, 2023 (FY2023) and FY2024, lifted by its energy storage and portability solutions through its one-megawatt battery energy storage system (BESS).

The group posted a net loss of RM40.88 million on revenue of RM215.44 million in FY2022.

Citaglobal executive chairman Tan Sri Mohamad Norza Zakaria said the group plans to ramp up its BESS sales as it sees the product contributing more revenue to the group.

“Other than (focusing on our civil engineering and construction) order book, what we are focusing a lot right now is to sell BESS because once people use this product — or if it can (be) sort of replicated to all government agency or whoever party that needed renewable energies component to replace diesel — this is honestly better than billions of order book,” he told The Edge after the group’s 18th annual general meeting (AGM) here on Tuesday (May 30).

As at end December-2022, Citaglobal’s order book stood at RM733.2 million, while its tender book totalled RM1.67 billion.

Mohamad Norza said the group will focus more on the renewable energy (RE) and telecommunication sectors, instead of focusing on bidding for civil engineering and construction tenders alone.

“We want to shift away from competing for (infrastructure construction) tenders — because the margins are squeezed. This (RE) is the purpose of meeting the profit,” he said.

The acquisition of Citaglobal Engineering Services Sdn Bhd (CESSB) in November last year resulted in Citaglobal slipping into a net loss of RM40.88 million in 4QFY2022, from a net profit of RM3.69 million a year earlier, mainly due to the impairment of goodwill arising from the acquisition of RM47.9 million.

In announcing its 4QFY2022 results on Feb 28, Citaglobal said stripping off the one-off goodwill impairment, the group would have registered a pre-tax profit of RM2 million and RM8.8 million for 4QFY2022 and FY2022 respectively.

Since the losses in 4QFY2022 were simply a reflection of the impairment and purely an accounting entry, Citaglobal is optimistic that it will return to profitability this year, said Mohamad Norza.

“For the first- and second-quarter (of FY2023), we will definitely see profits, and this (position) will build up until the end of the year. This is (on the back) of a net profit guarantee (of RM60 million) for FY2023 and FY2024,” he added. The acquisition of CESSB sees Citaglobal providing a three-year aggregate net profit guarantee to the group of RM60 million for the financial years 2022 to 2024.

Meanwhile, Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah has raised his stake in Citaglobal to 6.8%, according to the group's bourse filing on Monday (May 29). The King first emerged as a substantial shareholder in Citaglobal in September 2019.

To this, Mohamad Norza said the group’s shareholders have entrusted it in the long run, following its venture into the two new pillars of RE and telecommunication infrastructure.

“This shows the trust and confidence of the shareholders in the management of the company, and (the shareholders) believe that the company has a good future, especially when they see that we are very serious in what we are doing, both in RE and telecommunication infrastructure,” he said.

Mohamad Norza holds an indirect stake of 39.21% in Citaglobal through TIZA Global Sdn Bhd and Citaglobal Energy Resources Sdn Bhd and a 0.006% direct interest.

At 3.43pm on Tuesday May 30), Citaglobal shares were up one sen or 0.74% at RM1.36, with 102,200 shares changing hands. Its market capitalisation stood at RM567.83 million.