KUALA LUMPUR: The engineering and energy solutions provider Kejuruteraan Asastera Bhd (KAB) is eyeing substantial growth in its sustainable energy solutions (SES) segment, supported by a potential concession revenue of more than RM500 million until 2046.
KAB Group managing director Datuk Lai Keng Onn said the revenue generation would come from its growing asset portfolio in clean and renewable energy generation, as well as energy-efficient solutions, aside from the existing contracts in Malaysia and Thailand, as well as ongoing acquisitions.
Lai said the SES concessions in hand bode well for the company to establish a stable revenue stream in the foreseeable future, complementing its core business of providing mechanical and electrical (M&E) engineering solutions.
"As for this year, revenue contribution from the SES segment was more than 25 per cent.
"For 2023, we estimate that the company would achieve about RM200 million in revenue, and expects its SES segment to see steady growth at between 20 per cent and 40 per cent in three to four years," he said at the company's post-extraordinary general meeting (EGM) virtual press conference today.
"Our unique expertise as a one-stop engineering and energy solutions provider serving similar target customer segments allows us to tap into the intersection between the SES and M&E businesses, making us well-equipped to fill this gap in the market in the region.
According to Lai, the company has recognised the enormous untapped potential in the SES segment as governments and businesses in Malaysia and Thailand become increasingly conscious of addressing climate change.
He said the company is pleased with shareholders' approvals for its diversification into SES and is poised to accelerate expansion to capture more opportunities in the fast-growing industries.
"Additionally, through our increasing asset base, we anticipate the SES segment to become a significant profit contributor to the company in the next few years," he said.
Meanwhile, Lim said the company's shareholders also approved a proposed private placement of up to 361.6 million new shares, representing approximately 20 per cent of its existing issued shares.
KAB will determine the independent investors and issue prices at a later date.
"Based on an illustrative issue price of RM0.37 and potential proceeds raised of RM134.0 million, the company intends to allocate RM36.0 million for working capital purposes, RM31.0 million for repayment of bank borrowings, RM66.2 million for funding existing and future SES projects, and RM0.8 million for estimated listing expenses.
"The company's enlarged share capital after the proposed private placement at the illustrative price of RM0.3705 would increase to RM237.6 million from RM103.6 million currently," he said.
KAB's enlarged share capital after the proposed private placement at the illustrative price of RM0.37 would increase to RM237.6 million from RM103.6 million currently.
In addition, Lai said the company is discussing with asset owners and potential clients for more acquisitions and projects in Malaysia and regionally.
He said the company's current estimated capital expenditure (capex) for existing contracts and potential projects amount to RM52.3 million for solar photovoltaic (PV) projects of over 17,000 kWp in capacity and RM220.0 million for clean energy projects of up to 65 megawatts (MW).
"The proposed private placement is thus timely to support our capital requirements for our continued expansion with an effective and cost-efficient funding source," he added.