KUALA LUMPUR (Mar 19): PBA Holdings Bhd announced that the Penang water tariff review announced last year will be implemented on April 1, 2015, which will see an average 16.7% increase for domestic users, and an 18.8% hike for commercial users.

Ahead of the announcement, PBA (fundamental: 1.5; valuation: 1.8) saw its share price climbing 13 sen or 10% to reach its intraday high of RM1.42 today.

In a statement today, the company said the review is in line with the Penang state government and Perbadanan Bekalan Air Pulau Pinang (PBAPP)’s goal to reduce water consumption and as a proactive measure to avoid water rationing.

“We need Penang water consumers to develop the habit of saving water to avoid rationing in this age of climate change,” said the Penang water operator.

It noted that water usage has increased to 298 litres per capita per day (l/c/d) over the January/February 2015 cycle, as compared to the average consumption of 293 l/c/d in 2014. The usage is also higher than the national average of 210 l/c/d in 2013.

“In other words, Penang faces a risk of rationing during extended dry spells simply because per capita domestic water consumption is too high. We need to reduce consumption to lower the risk to 210 l/c/d or a reduction of the present consumption of 298 l/c/d by 30%,” said PBA.

Despite the hike, PBA highlighted that Penang’s average domestic and trade tariffs are still lower than the national average.

PBA closed 12 sen or 9% to close at RM1.41, bringing its market capitalisation to RM427 million.

(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.)