KUALA LUMPUR: Kinergy Advancement Bhd (KAB) saw its net profit surging by nearly 19-fold to RM20.32 million for the third quarter (Q3) ended September 30, 2023 (FY23) against RM1.07 million posted in the same quarter last year, boosted by its sustainable energy solutions (SES) business.
For the quarter, KAB benefited from increased energy tariffs, new revenue streams, and a gain from acquisition, which resulted in outstanding financial performance.
KAB's SES segment for the quarter increased a whopping 254.8 per cent to RM12.88 million from RM3.63 million registered in Q3 FY22.
For Q3 FY23, KAB recorded higher revenue of RM48.62 million, compared to RM48.30 million in Q3 FY22.
Executive deputy chairman and group managing director Datuk Lai Keng Onn said the company's strategy of shifting focus from mechanical and electrical (M&E) engineering works in construction and property projects to higher-margin sustainable energy solutions has started to bear fruit.
"For 2023, we are poised to achieve our best financial performance since pre-pandemic of 2019. We are also on track to meeting our operational objectives and environmental, social, and corporate governance (ESG) sustainability targets," he said in a statement.
The recent acquisition of PT Inpola Mitra Elektrindo, a mini-hydropower plant, has also substantiated a gain that lifted KAB's bottom line.
Amongst other contributing factors, the steep rise in electricity tariffs has also benefited KAB in reaping additional gains from its existing and new power assets.
KAB's new power assets are a solar farm facility at Universiti Teknologi Malaysia Kuala Lumpur and a mini-hydro plant in Indonesia.
Following the positive Q3 FY23 results, KAB's net profit for the first nine months (9M) FY23 increased slightly over 11-fold year-on-year (YoY) to RM26.23 million from RM2.30 million posted in the same period last year.
Revenue stood at RM136.46 million compared to RM143.92 million in 9M FY22.
The lower revenue was due to the temporary effects of strategically repositioning KAB's contract portfolio with a greater focus on SES.
SES contributed about 19 per cent of KAB's total revenue in 9M FY23 compared to just 8.2 per cent in 9M of FY22.
As of September 30, 2023, KAB is well-supported with an order book of RM911 million, comprising RM751 million for SES and RM160 million for M&E segments.
Meanwhile, approximately RM2.51 billion and RM293 million worth of tenders for SES and M&E are still pending.
Moving forward, KAB is actively expanding its client base in the energy landscape as it pushes ahead with its penetration into ASEAN markets, offering high growth potential, mainly attributed to its provision of value-adding sustainable solutions to businesses, showcasing its capability in delivering energy operational optimisation.
"We are delighted to have recently completed the acquisition of Future Biomass Gasification Sdn Bhd, a biogas plant located in Kedah.
"Year to date, we have successfully added three significant assets into our portfolio, namely, our solar, mini-hydro and biogas plants that will provide sustainable earnings and transform us into a holistic technical expert for a wide array of sustainable energy solutions," Lai said.
He said KAB's specialist capability has been recognised by Petroliam Nasional Bhd (Petronas), which awarded two engineering, procurement, construction, and commissioning (EPCC) contracts this year.
On November 6, 2023, Petronas appointed KAB to provide RM33.30 million in EPCC for utility expansion and energy infrastructure enhancement of liquefied natural gas (LNG) carriers transformation to floating storage units at Pengerang.
"This award strengthens our position within the sustainable energy space and our capabilities in delivering competent standard services and solutions to clients.
"We hope to replicate our success with more job wins in the sustainable energy space in the future," Lai said.