KUALA LUMPUR: KNM Group Bhd (KNM) expects its overseas international renewable energy (RE) projects to contribute to its earnings by as early as the first quarter ending March 31, 2016 (1QFY16).
KNM chief executive officer Lee Swee Eng said yesterday the group’s two RE projects in Thailand and Peterborough, the United Kingdom, from which it expects to see recurring income, will be contributing 35% to its earnings.
Lee explained that the group’s 72% stake in the biofuel plant in Thailand is expected to make up 10% of the company’s net profit in FY16. “We expect that the plant will be producing ethanol by 1QFY16. We will also be getting eight years of incentives from the Thai government,” he told reporters after the company’s annual general meeting (AGM) yesterday.
Phase 1 of the biofuel plant can produce between 200,000 litres and 400,000 litres of ethanol a day, he said.
As for its RM2 billion waste-to-energy plant in Peterborough, Lee said phase 1 of the project is expected to generate 17.6mw of electricity and contribute 25% to earnings from FY17.
Construction work on the 80mw Peterborough plant on a 30-acre (12ha) land is slated to begin in 4QFY15 and is expected to begin generating income from 3QFY17, Lee said. On the company’s order book, Lee said it currently stood at RM4 billion, including its Peterborough project.
He said 20% of the company’s order book comprises Malaysian jobs, but the company is looking at increasing the local portion with downstream works planned at the refinery and petrochemicals integrated development in Pengerang, Johor. He also said the company’s overall tender book stood at RM13 billion to RM14 billion, with about RM4 billion to RM5 billion worth of bids on projects in Pengerang alone.
This year, the company expects its earnings will mainly come from its foreign contracts, existing order book of petrochemical and downstream works in the oil and gas industry, as well as jobs in Pengerang.
KNM chairman Datuk Ab Halim Mohyiddin said the company is looking at other RE projects in Malaysia, particularly biomass plants. “We are talking to some plantation companies. If they have a project, we will be interested,” he added, but declined to reveal names.
This article first appeared in The Edge Financial Daily, on June 25, 2015.