KUALA LUMPUR (June 26): Fitters Diversified Bhd has signed a 16-year Renewable Energy (RE) Power Purchase Agreement (REPPA) with Tenaga Nasional Bhd (TNB) to sell electricity generated from its biogas facility in Baling, Kedah to the national power grid beginning February 2016.
Fitters managing director Datuk Richard Wong said the new deal is expected to bring RM6 million in additional revenue to the group a year.
Fitters, via its RE unit Future Biomass Gasification Sdn Bhd, was earlier granted a feed-in tariff rate by the Sustainable Energy Development Malaysia (Seda) to generate up to 2 megawatts (MW) of electricity from renewable resources.
Wong said the electricity will be generated through the biogas recovery from palm oil mill effluent (POME) in Baling.
The biogas capture plant project is certified by the Ministry of Energy, Green Technology and Water under the Green Technology Financing Scheme and is an integration between the existing palm oil mill and the group's green technology.
"We expect the plant to be fully commissioned in the last quarter of 2015, with all equipment in place," Wong told reporters after the group's annual general meeting here today.
RE contributed RM2.59 million or 0.75% of the group's revenue in the financial year ended Dec 31, 2014 (FY14).
Wong also said Fitters plans to venture into green technology.
"We have implemented one [green technology project], moving from plasma gasification to ozonator. This is not RE, but is green technology that focuses on energy saving.
"Going forward, there will be one or two more green technologies that we will be introducing this year," said Wong, noting that the technologies are from a partner in Germany.
The biogas plant will also produce dry long fibre (DLF), typically used for production of mattresses and other industrial applications, as well as biofuel briquettes from empty fruit bunches.
Fitters has received pioneer status approvals from the Malaysian Investment Development Authority for the production of DLF and biofuel briquettes, as well as for biogas capture and power plant.
Meanwhile, Wong said for FY15, Fitters will remain focus on its four key segments, namely fire services, property development and construction, renewable energy, and green palm oil mill and hypro PVC-O pipes manufacturing and distribution.
However, Wong did not reveal the group's earnings projection.
"Things remain fluid. I can only say we are working very hard to sustain our earnings," Wong said.
For FY14, Fitters recorded a net profit of RM30.10 million on revenue of RM347.28 million, a decline of 23.25% and 26.50% respectively from FY13.
On its Plaza Pekeliling project, Wong said further approvals needed to begin refurbishment works will be completed by the end of August this year.
Fitters had acquired 70 parcels of office lots and 363 units of car park at Plaza Pekeliling from GCP Tower Sdn Bhd for RM28.28 million. This was to be redeveloped into high-end work suites and small office home office (SOHO) or hotel.
As at 3.55pm, Fitters (fundamental: 1; valuation: 1.8) shares were traded unchanged at 56.5 sen, with 229,500 shares done. Its market capitalisation stood at RM271.35 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.)