Stripping-out exceptional items amounting to RM203.3m arising from impairment loss of its associate Al-Hidd IWPP, Bahrain and Kapar Energy Ventures, Malakoff reported core net profit of RM278.7m or a 17-fold jump on a YoY basis. The performance is underpinned by higher contribution from Tanjung Bin Power (TBP) and Tanjung Bin Energy (TBE) given the higher Applicable Coal Price (ACP). Meanwhile on QoQ basis, the Group’s performance dipped slightly by 2.3%, impacted by higher weightage average fuel costs. Overall, the Group FY22 core net profit of RM746.3m far exceeded both our and consensus full year estimates at 143% and 158% of full-year numbers respectively. Despite the outstanding performance in FY22, we expect its bottom-line will be normalised in the coming quarters on the back of stable coal price. We maintain our Outperform call and am unchanged DCF based target price of RM1.02.
- Bumper performance for FY22. Malakoff reported record revenue of RM10.4bn for FY22, representing growth of +60.2% on a YoY basis, its highest so far on record. This is primarily due to higher energy payments recorded from TBP and TBE on the back of the higher ACP. Correspondingly, the Group’s headline net profit rose 16.1% to RM302.2m. After stripping out exceptional items arising mainly from impairment losses from its associates amounting to RM431.9m in FY22, core net profit grew by +167.7%. We expect the outstanding performance will be one-off in FY22, and will normalise in the upcoming quarters on account of more stable ACP.
- Powering up TBE. To recap, the TBE power plant experienced Low Pressure Turbine Blades damage in 4QFY21, which caused a significant reduction of Equivalent Availability Factor (EAF) from 100% to 37%. In 4QFY22, the plant underwent 55 days Schedule Outage and 17 days Forced Outage to carry out the blades replacement for its turbine and other rectification and maintenance works. This will ensure maximum load delivery and operations in full capacity at 1,000MW for the plant in FY2023 onwards.
Source: PublicInvest Research - 24 Feb 2023
