KUALA LUMPUR: Public Investment Bank Bhd has cut its estimate for Cypark Resources Bhd to a net loss of RM16 million for financial year 2025 (FY25) due to prolonged rectification works on the company's waste-to-energy (WTE) segment.
It also reduced Cypark's net earnings by 53 per cent and 25 per cent for FY26 and FY27.
Other factors that contributed to the firm's estimate were Cypark's rescheduling of the commercial operation date (COD) of Large Solar Scale 2 (LSS2) Danau Tok Uban to the fourth quarter of 2024 (Q4 2024) and higher financing costs after LSS3 COD.
Cypark reported another quarterly core net loss of RM26.8 million in the first quarter ended July 31, 2024 (Q1FY25), mainly due to the absence of derecognition of RM46 million in deferred tax assets in Q4FY24, following the overprovision during the kitchen sinking exercise in FY23.
"Overall, 1QFY25 performance was lagging ours and consensus full-year net profit after tax and minority interest's estimates of RM9.7 million and RM25.2 million, respectively, with the variance largely due to rectification works of its WTE plant," it said.
It added that Cypark's WTE rectification and upgrading works are estimated to be completed by October 2024.
"However, we expect the resumption of its operation will be on a staggered basis. Cypark has incurred about RM7 million in capex for the rectification works, which are fully claimable under the insurance, and RM2 million for upgrading works.
"Cypark also believes it is entitled to an insurance claim for loss of income on its revenue worth RM14 million due to the unscheduled downtime," it said.
The firm maintained a "Neutral" call on the stock with a target price of 70 sen.