KUALA LUMPUR (Sept 24): Generator rental firm Express Powerr Solutions (M) Bhd (KL:XPB), which debuted on the ACE Market on Wednesday (Sept 24), expects to sustain its stronger profit margins for the financial year ending Dec 31, 2025 (FY2025), despite changes to its Sabah contract structure this year.
Earlier, Express Powerr opened at 21.5 sen, up 7.5% from its initial public offering (IPO) price of 20 sen. At the noon break, the stock had surged 15% to 23 sen, with more than 152 million shares traded, making it the most active counter on Bursa Malaysia.
Managing director Lim Cheng Ten said the group’s gross profit margin for the three months ended March 31, 2025, stood at 62.4% despite the removal of diesel pass-through costs from its Sabah contract, compared to a full FY2024 gross profit margin of 53%.
“Even though the top line may be affected, the bottom line, in terms of margin, we are getting better [margins],” Lim told a press conference after the listing ceremony.
He noted that contributions from the Sabah market, which accounted for about 30% of group revenue in FY2024, are expected to moderate this year as diesel costs are stripped out, though profit margins will remain supported. Express Powerr initially entered Sabah on a short-term basis but has since secured a two-year contract.
Lim added that contributions from rig-safe and plant maintenance jobs in the oil and gas (O&G) sector are also expected to help keep margins elevated.
“Especially if we were to go into oil and gas, I think we definitely can [sustain profit margin] and it’s definitely our goal to do so,” he said.
Meanwhile, the group's generator rentals for the planned maintenance are expected to contribute over 60% of turnover in FY2025, surpassing emergency rentals that historically made up the bulk of the business. Standby services, meanwhile, remain below 5%.
Express Powerr’s market share in Malaysia’s generator rental segment has risen from 5.8% to 7.8% in recent years. Lim said the group aims to build on this with the planned acquisition of 36 additional generators funded from its RM49.08 million IPO.
While the prospectus indicated the fleet expansion would span three years, Lim said the timeline could be shortened. “We may not even take three years,” he said.
Lim also reaffirmed its 30%–50% dividend payout policy. "It is our goal to make sure that all stakeholders are rewarded," he said. “If you look at our history, we have been consistently picking up in the last few years, slowly increasing to about 40%. And if we are able to do that, it would be very ideal.”
Express Powerr raised RM49.08 million from its IPO, of which RM36 million will fund the purchase of generators and medium- to high-voltage equipment. The company, established in 2005, counts Tenaga Nasional Bhd (KL:TENAGA) among its key clients and also serves mechanical and electrical (M&E), construction and manufacturing players.