KUALA LUMPUR: PUC Founder (MSC) Bhd, which is making its maiden venture into solar power production with its 1mw solar power farm project in Sg Petani, Kedah, is expecting a 21-year recurring income of RM1 million per annum from the fi rst quarter of its fi nancial year ending December 2016 (1QFY16).
The power generated from the farm will be sold to Tenaga Nasional Bhd at a tariff of RM1.035 per kWh, PUC Founder managing director Cheong Chia Chieh told reporters after the company’s annual general meeting yesterday.
To recap, PUC Founder’s subsidiary MaxGreen Energy Sdn Bhd in March received the feedin-tariff (FIT) approval from the Sustainable Energy Development Authority (Seda) to develop and operate its estimated RM8 million, 1mw solar farm that will be commissioned for construction soon.
PUC Founder (valuation: 1.1; fundamental: 2.15) is also embarking on another 50mw solar farm and plans to submit an application to Seda to be an approved independent power producer after the group resolves the plant’s land and funding issues by the first quarter of next year.
On June 1, PUC Founder said it was looking to raise funds for the 50mw solar farm project through a rights issue, private placement, strategic investments or bank borrowings.
On the cost of the 50mw solar farm project, Cheong declined to specify but said it would only require phase-by-phase funding and that the group had a good cash balance of RM22 million as at Dec 31, 2014.
"We are now in the midst of looking for land and seeking [more] knowledge because 50mw is huge. We are also enhancing our capabilities through mergers and acquisitions," he said.
Its acquisition targets will be engineering, procurement and construction companies as the group is looking to strengthen its base in the energy sector, said Cheong.
He said the steady income from the energy sector will balance out the risks in its new business segments — electronic payment (e-payment) and mobile Internet — for which it had set aside RM10 million as capital expenditure for this fi nancial year.
"The return on investment from the energy sector is quite stable whereas we expect the mobile Internet plus featuring applications, and e-payment sectors, to have higher risk and growth.
"We see growth next year with these new sectors. Overall [growth] will defi nitely be more than 10%. We see double-digit growth in the mobile Internet and e-payment sectors," he said.
In the fi rst quarter (1Q) of FY15 ended March, PUC Founder’s net profi t stood at RM1.17 million, down 68% from RM3.6 million in 1QFY14, on the back of weaker revenue of RM8.7 million (1QFY14: RM16.6 million).
Cheong said PUC Founder will divest the biometric sector in the next two fi nancial quarters due to reduced contribution from the sector.
"About 90% of our revenue comes from the media and advertising division but with the new transformation, including business to client and client to client e-payment service, we project to grow constantly and substantially in the next few years," he said.
Its shares closed up half sen or 3.6% to 14.5 sen, giving it a market capitalisation of RM149.2 million.
This article first appeared in The Edge Financial Daily, on June 10, 2015.