KUALA LUMPUR: Malakoff Corp Bhd’s net profit for the fourth quarter ended December 2018 jumped more than two times to RM85.5 million from the same period in 2017 but the net profit for 2018 fell to RM274.4 million from RM295.9 million in the preceding year.
The higher net profit is primarily due to higher energy payment recorded from Tanjung Bin Power Sdn. Bhd and Tanjung Bin Energy Sdn Bhd coal plants on the back of higher applicable coal price.
However, the lower capacity payment recorded by Segari Energy Ventures Sdn Bhd given the reduction in tariff under the extended power purchase agreement has contributed to the lower net profit in 2018.
The absence of Tanjung Bin Power’s compensation payment received from settlement of dispute with IHI Corp Japan over the former’s boiler failure recorded in the preceding year is also a contributing factor.
Malakoff’s revenue increased 5.59 per cent and 3.09 per cent for the fourth quarter and 2018 to RM1.89 billion and RM7.35 billion respectively.
Malakoff said Malaysia’s power demand growth was expected to sustain at two per cent to 2.5 per cent while the renewable energy development should ease pressure on power generation costs.
“The outlook for Malaysia’s power sector in 2019 is expected to be stable, supported by regulatory reforms as the nation gradually transitions towards a low-carbon economy,” it said.
The group expects performance to remain satisfactory for the financial year ending December 2019.
Malakoff continues to focus on improving the reliability and efficiency of its assets, especially its Tanjung Bin Energy power plant.
“The plant is scheduled for maintenance and rectification works in the first and second quarter of this year to address and resolve its operational challenges, to be undertaken by the original equipment manufacturer.
“This underscores the group’s commitment to continuously improve the reliability and efficiency of its assets.
Malakoff is exploring opportunities in the renewable energy sector particularly on hydro, biogas and wasteto-energy.
“The group will also be participating in the government’s open tender for the third round of the 500MW large scale solar projects, which was announced recently,” it said.