KUALA LUMPUR (Dec 9): Kumpulan Powernet Bhd (KPower) is expecting to post a strong earnings performance in its financial year ending June 30, 2021 (FY21).
At a press conference following the conclusion of its annual general meeting, KPower deputy chairman and managing director Mustakim Mat Nun opined that it posted encouraging results for the first quarter ended Sept 30, 2020 (1QFY21).
"That is an indication to the market we are going to make quite a strong registered growth from a sales angle and profit after tax angle cumulatively for FY21," said Mustakim.
He said that he is confident about the group's prospects given that ASEAN has raised its target for renewable energy in the region's installed power capacity to 35% by 2025, from 20% previously.
"That is another indication that there will be growth in that particular industry (renewable energy), and I think this will be reflected quite well in FY21," he added.
KPower's 1QFY21 net profit stood at RM8.15 million, from RM948,000 a year ago, on construction-related activities. Quarterly revenue jumped 411% to RM57.06 million from RM11.16 million a year earlier.
According to Mustakim, the group targets RM2 billion for its FY21 order book. Currently, its secured projects stand at RM1.4 billion, and outstanding secured projects are worth RM1.2 billion.
He explained that currently, the group has tendered for RM4.21 billion worth of projects.
Of this sum, it has bid for RM1.35 billion worth of infrastructure and energy projects in the Middle East. It has also bid for RM1.17 billion worth of energy projects in Indonesia.
As for Malaysia, the group has bid for RM1.04 billion worth of projects, which are focused in the infrastructure, energy, utility and logistics sectors.
In Laos and Nepal, Mustakim explained that KPower has submitted bids amounting to RM44 million and RM600 million respectively.
As such, the group hopes that it will be able to secure some of the projects that it has submitted bids for, and noted that it will be bidding for more projects as FY21 progresses.
In terms of capital expenditure (capex) for FY21, Mustakim said the group anticipates deploying the funds towards a large scale solar 4 (LSS4) solar project it is currently bidding for. It estimates that the total cost of the project to be around RM180 million, with their equity portion to be between RM60 million and RM70 million.
At the same time, the group will use some capex as a "bridger" for some of its existing projects.
Mustakim added that it is looking to capture certain markets outside of Malaysia, and is exploring joint ventures and mergers and acquisitions (M&As).
"There are a few opportunities and possibilities that we are exploring, which we will announce to the public once they have materialised," Mustakim said. He added that the group is looking at M&A activities to boost its technological capabilities.
Chairman Mohd Abdul Karim Abdullah said that the group forecasts there is a global shift towards the hybridisation of energy sources.
"What KPower is looking at, for example, is to combine wind technology with solar technology. This will be very resourceful, as, in certain locations or countries, wind density might be quite dense, or high. Coupled with solar technology, it can conserve and produce quite a sizeable amount of electricity," the chairman explained.
Shares in KPower finished the morning trading session 0.76% or four sen higher at RM5.29 apiece, yielding a market capitalisation of RM589.21 million. It saw 368,500 shares done.