Wednesday 08 Jan 2025
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KUALA LUMPUR (Dec 23): Oil and gas services provider Coastal Contracts Bhd (KL:COASTAL) said a consortium led by the group has secured the bid to develop a 15MWac large-scale solar photovoltaic (PV) plant on Sabah's east coast.

Coastal Contracts' wholly-owned subsidiary, Coastal Power Holdings Sdn Bhd (CPHSB), holds a 90% stake in the consortium, with the remaining 10% held equally by Pleasant Engineering Sdn Bhd (PESB) and Bina HT Sdn Bhd (BHSB).

Coastal Solar Sdn Bhd, another wholly-owned subsidiary of the group, will serve as the special purpose vehicle to execute the project. The project will be funded through internally generated funds and/or bank borrowing, according to Coastal Contracts’ bourse filing.

The consortium submitted its bid on Oct 22, in response to the Sabah Energy Commission's request for proposal (RFP) issued in May for the Large Scale Solar Sabah (LSS Sabah) 2024 initiative.

Coastal Contracts said that in awarding the project to Coastal Solar, the commission has imposed specific conditions, such as limiting the maximum export capacity of the solar PV plant to 15MWac. Additionally, the solar power purchase agreement with Sabah Electricity Sdn Bhd will span 25 years, and the plant’s commercial operation date must fall between April 1, 2027, and June 30, 2027.

“The project will not have any material effect on Coastal’s earnings per share, net assets per share, gearing and share capital in respect of the financial year ending 31 December 2024.

“However, the project is expected to contribute positively towards Coastal’s future earnings per share and net assets per share from the financial year ending 31 December 2027 towards throughout the duration of the project,” said the group.

For the third quarter ended Sept 30, 2024, Coastal Contracts recorded a net loss of RM49.07 million, compared with a net profit of RM79.55 million a year earlier, due to an unexpected unrealised foreign exchange loss and the off-hire of its liftboat for periodic maintenance. Quarterly revenue declined 86.26% to RM6.27 million from RM58.36 million.

Shares of Coastal Contracts closed down one sen or 0.65% to RM1.52 on Monday, giving the group a market capitalisation of RM819.1 million.

Edited ByS Kanagaraju
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