Friday 29 Mar 2024
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This article first appeared in The Edge Financial Daily, on April 22, 2016.

 

KUALA LUMPUR: Malakoff Corp Bhd has allocated RM900 million in capital expenditure (capex) for its expansion plans this year, of which RM700 million has been earmarked for the new 1,000mw Tanjung Bin Energy power plant.

Malakoff acting chief executive officer Habib Husin said the independent power producer (IPP) is eyeing opportunities for expansion both domestically and overseas to meet its targeted capacity of 10,000mw by 2020.

Despite the large amount of capex, Malakoff will maintain its 70% dividend payout policy as the allocation for expansion has been fully funded, said Habib.

“We have an abundance of land bank in strategic locations where our power plants are located, so there are opportunities for domestic repowering and expansion.

“We are also looking at opportunities in Southeast Asia, such as in the Philippines and Indonesia, and also in developed markets where there are pockets of opportunity, as well as the Middle Eastern and North African regions,” said Habib at the press conference after the IPP’s annual general meeting yesterday.

Habib said the group held several acquisition talks overseas, but declined to reveal the details as discussions are still ongoing.

Executive vice-president Shaharul Farez Hassan said the new plant commenced operations last month, with an expected contribution of about RM500 million per year.

For financial year ended Dec 31, 2015 (FY15), the group paid out a total dividend of seven sen per share, equivalent to 77% of its earnings for the year.

The group reported a 33% jump in its net profit to RM453.23 million for FY15, from RM341.55 million a year earlier, while revenue fell 5% year-on-year to RM5.3 billion from RM5.59 billion.

A large portion of its revenues are generated from domestic operations, accounting for 90% of its top-line, while the balance comes from its overseas operations in Saudi Arabia, Bahrain, Algeria and Australia.

Going forward, Shaharul said the group would either set up new plants or expand through acquisitions of other plants. He added that the main domestic opportunities this year would be in renewable energy, with the government’s large-scale solar generation target of 200mw per annum from 2017 to 2020.

Meanwhile, chairman Tan Sri Syed Anwar Jamalullail, said the group is bidding for waste-to-power plants projects by the Energy Commission and noted that the group’s gearing is still low, giving it room to raise capital if the need arises.

“Our gearing is still low at about 2.3 times, so we can still raise funds for more capex,” he said, adding that there is still space for a 1,000mw plant besides the Tanjung Bin Energy plant.

On the 3.93 billion dinar (RM139.78 million) suit against Malakoff’s 35.7%-owned unit Almiyah Attilemcania SPA related to the seawater desalination plant in Algeria, Shaharul said the unit is still undergoing the appeal process.

“That’s still going through the legal process but at this point in time, the liability has not crystallised. It’s still going through the appeal process and we are in the final stage. Unfortunately, this may take another two to three years to resolve itself, given the experience we have had with the legal system in Algeria,” he said.

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