Malakoff 2Q revenue falls to RM1.3b on power plant 'lower capacity factor'

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KUALA LUMPUR (Aug 21): Malakoff Corp Bhd reported a 27% drop in second quarter net profit from a year earlier as revenue fell after its gas-fired power plants generated less electricity.

In a statement to the exchange today, Malakoff said profit also fell as the group's bottom line a year earlier included fair valuation gains from the acquisition of the remaining 75% stake in Port Dickson Power (PDP).

For the quarter in review, Malakoff said net profit declined to RM86.29 million in the second quarter ended June 30, 2015 (2QFY15) from RM118.08 million. Revenue dropped to RM1.3 billion from RM1.47 billion.

"This (profit drop) was mainly due to recognition of fair valuation gains from our acquisition of the remaining 75% equity in PDP in corresponding quarter, share of losses recorded by an associated company, which was partly offset by lower finance cost following the redemption of the unrated junior sukuk musharakah from initial public offering (IPO) proceeds in the current quarter," Malakoff said.

Malakoff said revenue fell on "lower capacity factor" at its gas-fired power plants.

Cumulative 1HFY15 net profit, however, rose to RM190.2 million from RM120.73 million a year earlier. Revenue was lower at RM2.64 billion compared to RM2.7 billion.

Looking ahead, Malakoff expects its FY15 financials to improve compared to the preceding year.

The company said the forecast took into account contribution from Tanjung Bin power plant and PDP besides lower finance expenses.

"The Tanjung Bin power plant is expected to perform significantly better as all its three units are now available at full capacity and the gas-fired power plants are expected to
continue to perform well.

"The full-year contribution from PDP pursuant to its acquisition in April 2014 will further enhance the group’s profitability. The group’s finance costs will be lower with the redemption of the unrated junior sukuk musharakah from the IPO proceeds," Malakoff said.

At 12:30pm, Malakoff shares settled lower at RM1.42 for a market value of RM7.1 billion. Some four million shares changed hands.

At 2:32pm, the stock was traded at RM1.43.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)