KUALA LUMPUR (Aug 14): Ranhill Utilities Bhd (KL:RANHILL) posted a 45.8% decline in net profit to RM6.53 million in the second quarter ended June 30, 2024 (2QFY2024), from RM12.06 million a year ago, dragged down by an RM8 million reversal of profits previously recognised by its 51% owned-subsidiary Ranhill Worley Sdn Bhd.

In a filing with the local bourse on Tuesday, the group said the profit reversal was related to the oil and gas (O&G) segment in the design engineering services for a floating production, storage and offloading vessel job for a Brazilian O&G producer.

Revenue, meanwhile, fell 5.4% to RM561.44 million, from RM593.67 million, attributable to lower recognition from its Bidor solar project and its engineering services unit, Ranhill Worley, despite an increase in sales contribution in its water unit, RanhillSAJ.

For the first half of FY2024 (1HFY2024), the group’s total revenue inched up 0.9% to RM1.12 billion from RM1.11 billion, while net profit fell 27.2% to RM16.88 million from RM23.18 million a year ago.

In terms of prospects, Ranhill said the expected rise in water demand going into FY2024 and beyond — underpinned by catalytic projects like the Johor-Singapore Special Economic Zone and Special Financial Zone as well as data centres — coupled with the recent tariff hike in February 2024 augur well for its revenues going forward.

As for non-revenue water (NRW) opportunities, the group shared that it anticipates securing projects in Perlis, Kelantan and Pahang.

The group also said its power division had proposed an extension to the power purchase agreement of its 190MW Teluk Salut Power Plant in Sabah beyond its existing concession term that expires in 2029.

Over the last one month, Ranhill has seen changes in its board following the emergence of YTL Power International Bhd’s (KL:YTLPOWR) 70%-owned unit SIPP Power Sdn Bhd as its single largest shareholder.

On August 8, new executive directors associated with YTL Power were appointed to Ranhill’s board, as founder and executive chairman of Ranhill Tan Sri Hamdan Mohamad relinquished his position.

Yeoh Keong Yeen and Yeoh Keong Yuan, grandchildren of Puan Sri Tan Kai Yong @ Tan Kay Neong, a major shareholder of YTL Power, were appointed new executive directors of Ranhill.

YTL Power had on July 9 completed its mandatory general offer (MGO) for the Johor-based utility company with a controlling stake of 53.19%.

YTL Power first emerged as Ranhill’s substantial shareholder in November last year, after it bought close to a 19% stake for RM140 million, or 58 sen per share, from TAEL Management Co (Cayman) Ltd — the private equity firm that funded Hamdan during the privatisation of Ranhill Bhd and Ranhill Utilities in 2011.

An MGO was triggered in May this year, after SIPP bought a 31.42% equity interest in Ranhill for RM405.18 million, or 99.5 sen per share, from Hamdan.

Following Hamdan’s exit, the remaining substantial shareholders in Ranhill are UOB Kay Hian Pvt Ltd, which holds 9.1% stake for Singapore’s United Overseas Bank Ltd, and the state government of Johor, via Permodalan Darul Ta’zim Sdn Bhd with a 9.07% stake. Other notable shareholders include pilgrim fund Lembaga Tabung Haji with a 3.1% equity interest and state-controlled YPJ Corp Sdn Bhd with a 2.72% stake.

Since YTL Power first emerged as Ranhill’s substantial shareholder in November last year, Ranhill shares have jumped 1.5 times, closing at RM1.49 on Wednesday. The company’s market capitalisation stands at RM1.93 billion.