KUALA LUMPUR: Public Investment Bank Bhd (PublicInvest) has adjusted its forecast for Cypark Resources Bhd for the financial years 2025 and 2026 (FY25/FY26), reducing them by 48 per cent and 18 per cent respectively.
This revision is to account for decreased efficiency in the waste-to-energy (WTE) plant due to the staggered resumption of operations after the fire incident, as well as minor delays in the commercialization of the Danau Tok Uban (DTU) project.
Cypark reported its third consecutive quarterly core net loss after tax and minority interest (LATAMI) of RM68.4 million in the fourth quarter of financial year 2024 (4QFY24), an increase from the core net LATAMI of RM30.7 million in the third quarter of financial year 2024 (3QFY24).
"This was primarily due to the derecognition of deferred tax assets amounting to RM46 million, resulting from overprovision during the kitchen-sinking exercise in financial year 2023 (FY23).
"Additionally, the results were negatively impacted by an unexpected fire incident, which caused unscheduled downtime in its WTE plant, leading to a net loss before tax of RM13 million for that segment," it said.
PublicInvest noted that the FY24 net core LATAMI of RM106.2 million fell short of its consensus full-year net LATAMI estimates of RM43.1 million and RM34.7 million, respectively.
Meanwhile, Cypark achieved the commercial operation date (COD) for its 100 MW LSS3 Merchang project on June 9, 2024, seven weeks after the initial operations date of April 21, 2024.
"The completion of this LSS3 project is expected to provide Cypark with stable earnings from electricity generation for the next 21 years and allow the company to redirect resources toward completing the LSS2 DTU project by the third quarter of the of the calendar year 2024 (3QCY24)," the firm added.
It also anticipates that the WTE plant's operations will resume gradually, which will reduce earnings estimates.
PublicInvest maintains its 'Neutral' rating on Cypark, with a slightly reduced sum-of-parts target price of 80 sen, down from 86 sen.