KUALA LUMPUR (Apr 30): Taliworks Corp Bhd (Taliworks) is looking at one or two mergers and acquisitions (M&A) involving operational brownfield infrastructure assets in Australia and other foreign markets to increase its revenue.

Executive director Lim Yew Boon told reporters today that the M&A move — which is being pursued by Taliworks EPF Instructure Sdn Bhd (TEI), its 51:49 joint venture firm with the Employees Provident Fund (EPF) — is, however, only at its exploratory stage at the moment.

TEI, formed in August last year, aims to expand its overseas business, he said after the group’s annual general meeting.

“Within TEI, we are looking at acquiring long-term highway concessionaires that have strong recurring assets. As for the group, we have a few infrastructure projects, including water supply ones, earmarked in the current financial year.

“However, they are still at the tender stage so we cannot reveal them yet. As for the Australian projects, we cannot say when we aim to close the deals as we are still exploring,” he said.

Taliworks' (fundamental: 1.4; valuation: 2.4) order book currently stands at RM500 million.

Lim said the group was confident of seeing a slight improvement in its revenue in its next financial quarter (2QFY15) following the contribution from the water tariff reviews in Selangor and Langkawi, Kedah, early last year.

“We are operating at maximum capacity in Selangor, while in Langkawi the demand is high. Operationally, the water division has performed well with an all-time high production of treated water with maximum capacity on revised tariff structure.

“Increased demand is expected to be intact for years to come due to sustained demand for treated water,” he said adding that this segment contributes 50% to the group’s revenue.

Taliworks posted a total revenue of RM353.9 million for the financial year ending Dec 31, 2014, a 26% increase from RM281.8 million in the previous corresponding year.

“Profit after tax, which rose to RM303.2 million last year from RM25.1 million in 2013, was a result of gains from restructuring the group’s composition,” he said.

Meanwhile, Lim said its wholly-owned subsidiary in China, Taliworks (Yinchuan) Wastewater Treatment Co Ltd, which handles 80% of the province’s municipal wastewater, expects a revised tariff following the upgrading and expansion work on its plant.

“Upon completion, we would expect a revised tariff which is incorporated in the concession agreement, which takes into account our initial investment of RMB810 million (RM465 million).

“Expansion and upgrading of our first plant will complete in July. We hope to complete all four in 2017,” he said.

(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.)