KUCHING: Malakoff Corporation Bhd (Malakoff) registered higher pre-tax profit for the fourth quarter of 2016 (4Q16) ended December 2016.
The company in a filing to Bursa Malaysia yesterday said 4Q16 profit before tax (PBT) gained by 16 per cent year-on-year (y-o-y) to RM195.74 million from RM169.11 million recorded in 4Q15.
Malakoff in its accounts notes filed to the stock exchange said the higher PBT for 4Q16 was due to higher fuel profit margin offset by additional depreciation due to the change in estimate of residual values of gas-fired power plants and lower contribution from the Port Dickson Power Bhd due to lower tariff of the extended power purchase agreement (PPA).
Additionally, the company said the group’s 4Q16 revenue increased by 25 per cent y-o-y to RM1.71 billion from RM1.37 billion generated in 4Q15.
Malakoff explained that the higher turnover generated was due to revenue contribution by Tanjung Bin Energy Sdn Bhd pursuant to the commencement of its operation on March 21, 2016.
For financial year 2016 (FY16) ended December 2016, Malakoff noted turnover gained by 15 per cent y-o-y to RM6.09 billion from RM5.3 billion generated in FY15.
In spite of that, the company said the group’s FY16 pre-tax profit decreased by nine per cent y-o-y to RM637.5 million from RM701.2 million recorded in FY15.
Malakoff explained that the lower profit for FY16 was due to additional depreciation due to the change in estimate of residual values of gas-fired power plants, lower contribution from Port Dickson Power Bhd due to lower tariff of the extended PPA and higher maintenance costs, offset by higher contribution from its associates, insurance claim on rotor replacement and lower finance costs following the redemption of the unrated Junior Sukuk Musharakah.
Commenting on the group’s prospects, Malakoff said the group’s financial results for the financial year ending December 31, 2017 will be affected by the expiry of the existing Segari Energy Ventures Sdn Bhd (SEV) PPA in June 2017.
The company noted the new SEV PPA, which will take effect upon expiration of the existing SEV PPA stipulated lower levelised tariffs as compared to the existing SEV PPA.
Nonetheless, Malakoff said the group continues to implement strategic initiatives to secure growth opportunities for the future.
Apart from that, the company noted the group is focusing on enhancing efficiencies throughout its operations and hence expects the results to be sustainably positive for the financial year ending December 31, 2017.