Ranhill turns around in Q4 with net profit of RM17m from loss year ago

PETALING JAYA: Ranhill Holdings Bhd generated a net profit of RM17 million for the fourth quarter ended Dec 31, 2016 (Q4FY16), after making a net loss of RM64 million in the preceding year’s corresponding quarter, mainly due to an increase in volume of water consumption and customer base arising from new developments of housing and industrial areas, and reduction of finance cost and the consolidation of its subsidiary Ranhill Water Technologies Cayman Ltd.
On the revenue front, the group saw a 14.2% increase to RM382 million for the quarter under review, compared with RM334 million in the preceding year’s fourth quarter.
Going forward, the group had entered into a strategic partnership with SIIC Environment Holdings Ltd (SIIC) to jointly expand its China water business, from which it expects to see some growth.
Ranhill is looking to procure new wastewater concession contracts especially in the industrial waste sector as well as obtaining a favourable financing terms and possibly facilitate tariff adjustment negotiations, through this partnership.
SIIC will also be injecting a working capital of US$30 million (RM133.2 million) based on the memorandum of understanding the two parties had signed, for which Ranhill is looking to commence work.
“The collaboration will also mitigate any request for increase in local participation. The proceeds from the divestment will allow Ranhill to embark on potential growth in power sector, the international environment sector in Thailand and other potential investments,” its board of directors said.
“Growth in the local environment segment is expected to be supported by the increasing demand in water for the state of Johor, especially with the development of new housing and industrial areas,” added the board.
The company is also expecting growth in electricity demand from the group’s current 2 x 190MW plants, and has also received a letter from the Energy Commission to develop a 300 MW combined cycle gas turbine power plant in Sabah.
The group made a net profit of RM75.8 million for FY2016, after generating RM22.3 million in the previous year. Revenue for FY16 increased by 10% to RM1.4 billion compared with RM1.3 billion in the previous year.