KUALA LUMPUR: Ranhill Utilities Bhd's net profit dropped 29.35 per cent to RM13.19 million in the second quarter (Q2) from RM18.67 million a year ago.
Ranhill's revenue eased 13 per cent to RM368.88 million from RM423.99 million previously.
The group said the decrease in both net profit and revenue was due to lower water revenue and developer contribution.
This was added with a RM2.6 million discount to B40 of income group in Ranhill SAJ Sdn Bhd of RM39.7 million from the implementation of the Movement Control Order.
"The lower engineering, procurement and construction (EPC) revenue from Ranhill Water Technologies Sdn Bhd of RM18.1 million and reduction in power tariff, Capacity Payment Revenue-Capacity Rate Financial (CPR-C) upon full repayment of project loan also led to the lower results in Q2," it said.
Ranhill's environment business was the primary contributor with a net profit of RM79.7 million for the first half of the year, down from RM90.5 million in the previous year's corresponding period.
This was mainly due to lower water consumption and reduced contribution from RanhillSaj.
The power business recorded a lower year-to-date revenue of RM129.8 million for the first six months, compared with RM169.4 million in the same period last year.
Ranhill group president and chief executive Tan Sri Hamdan Mohamad said the disruption caused by the Covid-19 pandemic and Movement Control Order (MCO) had had some impact on the group.
Moreover, Hamdan said in a bid to help ease the burden on Malaysians during this tough time, Ranhill had also provided a discount to B40 households.
"Nevertheless, by ensuring that our core businesses in the environment and power sectors continued to generate stable cash flow, we were able to deliver sustained results," he said.
Hamdan said with efforts ongoing to contain the spread of Covid-19, the outlook for the second half of the year was uncertain.
Further to this, he said tariff adjustments were expected to take longer to materialise given the current situation.
"Despite this challenging climate, the group is committed to ensuring the sustainability of our businesses, building on our strong track record to continue scaling up our capabilities and operations in both our domestic and overseas markets," he added.
The group is now focused on exploring opportunities to expand its water supply operations to other states in Malaysia, particularly for Non-Revenue Water (NRW) management services, given its in-depth experience and success with reducing NRW in Johor.
The group continues to seek out new industrial water and wastewater treatment projects to grow the business in China and Thailand, particularly for major industrial parks.
"The group has seen progress in Indonesia, signing a Memorandum of Understanding and a Consortium Agreement with Maynilad Water Services, Inc., Metropac Water Investments Corporation, PT Varsha Zamindo Lestari and Perusahaan Perseroan PT Pembangunan Perumahan TBK to participate in the bidding process for a drinking water supply project.
"This would entail the development of a drinking water system from Jatiluhur dam to distribute drinking water to five areas in Jakarta, including Bekasi City, Bekasi districts, Karawang districts, Bogor districts, based on the allocation of raw water of 10,000 litres per second from Jatiluhur dam," it said.
Ranhill is also exploring prospects for solar energy via Large Scale Solar 4 and other means.
"With a view to supporting its long-term growth plans, the group is also exploring the possibility of a secondary listing on the Main Board of the Singapore Exchange Securities Trading Ltd.
"This would enable Ranhill to broaden its investor base and gain access to an additional platform for future fundraising to finance its regional expansion," it added.