KUALA LUMPUR: Cypark Resources Bhd is looking to double the capacity of its renewable energy (RE) generation to 60mw by 2015, according to the group’s chief executive officer Datuk Daud Ahmad.

He said the target is achievable, but hinges on Cypark’s successful bid to secure an additional quota of 20mw from the Sustainable Energy Development Authority Malaysia.

“We have to continue getting more quota to build more RE parks. The limitation we face is that we have to wait for more quota to be released, so that we can bid for it,” he said after Cypark’s annual general meeting yesterday.

Currently, Cypark has a total of 18 landfill sites, five of which have been converted into RE parks, generating up to 30mw of energy.

“Our target, subject to us being able to secure additional quota, is to add another 20mw for this year. But that will be a mix of the balance we already have in hand and the new quota we hope to secure.”

He said Cypark aims to increase the revenue and profit contribution from RE and environmental engineering to 60% and 70% by 2015, from the current contribution of 50%.

“We are on track to transform our business into a RE company from the traditional engineering, construction and landscaping company. Contributions from [RE and environmental engineering] have been increasing steadily.

“RE has a very bright future since it is cheaper than traditional forms of energy and slowly starting to gain acceptance in Malaysia, although more could be done here to promote RE initiatives,” he said.

When asked if market talk on Cypark teaming up with 1Malaysia Development Bhd (1MDB) to build the 50mw solar farm in Kedah is true, Daud said there is a very strong interest to work with the sovereign wealth fund.

On the group’s Smart waste-to-energy landfill project in Seremban, Negeri Sembilan, Daud said the first phase is nearing completion and that operations should start in June.

Looking ahead, Daud said the group’s prospects for the year ahead look promising.

“Our current earnings are maintainable and we expect some good growth. If the new projects and proposals we are working on are secured sometime this year, then they will contribute positively to our 2014 financial year [FY14]. If not, they will contribute towards FY15, depending on timing,” he said.

For the first quarter ended Jan 31, 2014, Cypark posted a net profit of RM7.73 million, 17% higher than the RM6.59 million in the previous corresponding period, while revenue was higher at RM51.46 million from RM50.97 million earlier.

On the group’s dividend policy, Daud said the company will consider raising its payout to about 40% of profit from the current 25% after 2015 when there will be more cash coming in after Cypark’s business transformation is completed.

This article first appeared in The Edge Financial Daily, on April 23, 2014.