Taliworks Q4 net profit down on absence of disposal gain, higher provision

PETALING JAYA: Water and infrastructure company Taliworks Corp Bhd’s net profit in the fourth quarter ended Dec 31, 2016 (Q4FY16) declined 37.5% to RM32.01 million in the absence of a RM59.5 million disposal gain registered the year before and higher provision for discounting on deferred payments due from Syarikat Pengeluaran Air Selangor (Splash). The group made a net profit of RM51.22 million in the previous corresponding quarter.
Revenue fell 6.9% to RM69.01 million, compared with RM74.1 million in the same period last year.
The group said excluding the disposal gain and provision for discounting, its group profit before tax would be higher at RM38.5 million, up from RM15.1 million recorded in corresponding quarter mainly attributable to the higher income derived from management fees and unrealised foreign exchange gain on disposal proceeds in US dollars raised from the disposals of its interests in China.
On prospects, Taliworks said it expects the Sungai Selangor Water Treatment Works Phase I (SSP1) operation, which is the main contributor to the group, will continue to run its production above its designed capacity of 950 million litres per day (MLD), due to continuous increase in demand for treated water in the Klang Valley.
Taliworks’ operating profit is largely driven by the performance of the water treatment, supply and distribution business as this segment contributes the bulk of its revenue and profits, it noted.
The group added it will continue with its strategy to focus on mature operational cash-generating utilities/infrastructure businesses with a view of generating new income streams, and to provide a recurring and stable source of cash flow to the group to support the company’s dividend policy.
The group announced a fourth interim single-tier dividend of 2 sen in respect of the financial year ending Dec 31, 2016, to be paid on March 31, 2017.
For the full-year period, its net profit grew 47.3% to RM127.5 million, against RM86.5 million last year, while revenue up 4.4% to RM304.8 million, from RM291.9 million previously.