PETALING JAYA (Feb 23): Malakoff Corp Bhd turned to net loss of RM357.1 million in the fourth quarter ended Dec 31, 2023 (4QFY2023), from a net profit of RM41.9 million last year, dragged by the group’s independent water and power producer (IWPP) associate in Bahrain.

According to Malakoff’s filing with Bursa Malaysia on Friday, the losses was primarily due to a substantial share of loss from the 40%-owned Al-Hidd IWPP, as well as further impairment loss on the group’s carrying value of investment in the Gulf outfit.

“Excluding the substantial share of loss from Al-Hidd IWPP and impairment loss on the group’s carrying value of investment in Al-Hidd IWPP, the group recorded a Patami [net profit] of RM72 million in 4QFY2023,” said Malakoff in a statement.

Quarterly revenue fell 23.89% to RM2.26 billion, from RM2.97 billion, due to lower energy payment for Tanjung Bin Power power plant — amid a decline in applicable coal price — as well as absence of revenue from GB3 whose power purchase agreement expired on Dec 30, 2022.

For the full year ended Dec 31, 2023 (FY2023), Malakoff reported a net loss of RM884.36 million, compared with a net profit of RM255.03 million in FY2022, on the back of 12.4% lower revenue of RM9.07 billion, the group reported.

It noted that the weaker revenue was partially moderated by higher energy payment and capacity income recorded from Tanjung Bin Energy plant, given the higher despatch factor and shorter duration of plant outage, the group stated in the announcement.

Nevertheless, Malakoff’s managing director and group CEO Anwar Syahrin Abdul Ajib said he is optimistic about the group’s prospects and is looking forward to 2024, based on the execution of Malakoff’s strategic initiatives.

“This past year, we faced challenges mainly due to fluctuating coal prices. As the leading independent power producer [IPP], we understand the impact of financial uncertainties on our operations due to the rising fuel costs which caused setbacks in our fuel margins.

“The ACP added to the challenges, and as it decreased, we had to use coal at rates higher than the average, significantly affecting our financial performance,” said Anwar.

He noted that even in a challenging business environment, Malakoff managed to generate almost 30 terawatt-hour of electricity in FY2023, an increase of 6.98% compared with FY2022, despite the absence of contribution from its expired GB3 gas plant.

He added that the group has been making progress in expanding its renewable energy portfolio, such as achieving the financial close for RP Small Hydro Kelantan in July 2023 and secured a total of 18.2MW of rooftop solar projects throughout 2023, as well as an agreement with Abu Dhabi Future Energy Company PJSC-Masdar.

Alam Flora Sdn Bhd, he said, collected less waste in 4Q due to the expiry of the Kepong
Transfer Station and Cameron Highlands Mini Incinerator, but saw a 14.6% increase in recyclable materials collected.

“Looking ahead, we aim to expand our presence both locally and internationally by leveraging on our technical expertise. We are actively participating in competitive bids for solar projects initiated by the Malaysian government.

“Additionally, we are open to potential mergers and acquisitions (M&As) in the waste management and environmental solutions sector. Our commitment extends to continually exploring and implementing viable green technologies for the advancement of Malakoff,” said Anwar.

Malakoff closes 1.5 sen lower at 66 sen on Friday, valuing the group at RM3.28 billion. Year-to-date, the counter is up 4.76%.