Analysts disappointed with Mudajaya’s delayed power plant completion

KUCHING: Analysts are disappointed with Mudajaya Group Bhd’s (Mudajaya) recent revelation that the completion of its power plant has been delayed till the final quarter of the year.

According to the research arm of Public Investment Bank Bhd (PublicInvest Research), this was disappointing as the target is missed yet again, demonstrating the difficult working environment in India.

“Mudajaya is again delaying the commercial operation date, which we understand was due to unforeseen hiccups of securing certain M&E components that important to complete the first unit of its four times 360 megawatt (MW) coal-fired power plant in India,” the research arm explained.

Hence, PublicInvest Research noted that earnings from its 26 per cent owned associate might take longer than expected, with the nascent earnings to happen in 2015 vis-à-vis this year.

Aside from the delay in completion of the power plant, the research arm highlighted that Mudajaya’s need to replenish order book (circa RM1.2 billion) is of utmost importance now for the Group considering no significant jobs clinched since last year.

“We understand that the management is one of the few invited bidders for the new power plants (Track 3A & 3B) and should expect some job packages to be announced in the next few months,” it opined, adding that total contract value for these two jobs can go as high as RM3 billion.

In the near term, it observed that Mudajaya’s earnings are driven by projects such as MRT Package V3, Tanjung Bin Power Plant Extension and Manjung Power Plant Extension.

Meanwhile, the research arm noted that new jobs targeted by Mudajaya include the Manjung Power Plant (1000MW or Track 3A), Track 3B (2000MW), and RAPID Power Plant in Pengerang, Johor (1,300MW) with combined value of circa RM4 to RM5 billion.




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