KUALA LUMPUR (March 16): Shares of Puncak Niaga Holdings Bhd jumped as high as 15.25% today, sparking speculation about the company’s next move, now that it has shed its water assets and is restructuring its oil and gas (O&G) division.

The stock gained as much as 18 sen to trade at RM1.36 earlier today, before paring gains and closing at RM1.30 at noon market close. Puncak Niaga was the eighth top gainer on the local bourse at noon time.

The stock has been trading downwards since Nov 25 last year, but began to pick up steam last Thursday.

Puncak Niaga, which primarily served as a water concessionaire, had relinquished all its water assets to the Selangor government for RM1.55 billion last year, as part of the state government’s move to restructure the water services industry.

The group had handed over its subsidiaries, Puncak Niaga (M) Sdn Bhd and Syarikat Bekalan Air Selangor (Syabas), to the state government’s Pengurusan Air Selangor Sdn Bhd (Air Selangor) in October last year.

The group had then announced that it would be earmarking RM1 billion of proceeds from the sale of its water assets to fund further expansion into the O&G sector or venture into oil palm plantation.

However, with depressed crude oil prices, the move to expand further into the O&G sector seems to have hit a snag.

TheSun had reported that Puncak Niaga looks set to exit the O&G business as well, with closure of its main O&G services subsidiary, GOM Resources Sdn Bhd, expected by the end of last month.

According to Puncak Niaga’s recent financial results, the company had slipped into a net loss of RM99.73 million or 23.27 sen per share in the fourth quarter ended Dec 31, 2015 (4QFY15), from a net profit of RM81.7 million or 19.76 sen per share in the fourth quarter of financial year 2014 (4QFY14).

This was on the back of a 94.41% drop in revenue to RM13.52 million in 4QFY15, compared to RM241.65 million in 4QFY14.

For the full year, net profit dropped 73.6% to RM65.58 million or 15.58 sen per share in financial year 2015 (FY15), from RM248.38 million or 60.51 sen per share in financial year 2014 (FY14); while revenue dropped 68.9% to RM188.69 million, from RM606.64 million in FY14.

The group saw its loss before tax widen sharply to RM152.4 million in FY15 compared to RM8.9 million in FY14, due to lower revenue in the O&G segment, impairment loss of goodwill and assets, coupled with higher operating costs from its construction segment.

The group’s cash and bank balances in FY15 stood at RM378.55 million, while loans and borrowings stood at RM39.2 million.

It said it is continuously looking to expand its operations in areas related to its core business in water and wastewater sewerage, environmental engineering and construction, in addition to new areas such as palm oil, property development, and food and beverage sectors.

It had also implemented a right-sizing exercise for its O&G division to cut down staff and operational costs to minimal levels, as the company “reviews its position in the sector.”