Malakoff looks at buying 10 power generation assets

Malakoff Corp Bhd Tanjung Bin Power Plant (coal-fired) in Johor

KUALA LUMPUR: Malakoff Corp Bhd is currently looking at proposals to acquire more than 10 power generation assets in line with a plan to increase its power generation capacity to 10,000 MW by 2020.

Group managing director Datuk Wira Azhar Abdul Hamid said Malakoff's focus was now more towards the "brown", rather than green field, as the company preferred to see a timely impact on its balance sheet.

"Of course, we have to do a due diligence and risk analysis (on the proposals) to see if it fits our business model, before we go into it," he told reporters after the company's AGM in Kuala Lumpur on Wednesday.

He said the group was also looking at expanding its presence in the international market, including the Middle East and Australia, as well as new opportunities in Europe.

"We are also looking at some developed markets and plan to go in with partners who can add value to our existence," he added.

To date, the group's total power generation capacity stands at 7,537 MW.

In terms of revenue, the contribution from Malakoff's power plants stand at 4% to date, while in respect of profit, it was about 25% of the total.

Meanwhile, Malakoff chairman Tan Sri Syed Anwar Jamalullail said revenue for the financial year ended Dec 31, 2016 (FY16) rose 15% to RM6.10bil compared to RM5.30bil in 2015, on the back of the revenue contribution by Tanjung Bin Energy Sdn Bhd pursuant to the start of its commercial operation on March 21 last year.

He said the group turned in a profit after tax and minority interest (PATMI) of RM355.5mil, a 21% decline from RM452.4mil in FY15.

"The decrease in PATMI was due to additional depreciation resulting from the change in estimated residual values of gas-fired power plants, plus a lower contribution from Port Dickson Power Bhd due to lower tariff of the extended power purchase agreement (PPA)," he added.

Syed Anwar said the performance in FY16 was also affected by higher maintenance costs offset by higher contributions from the group's associates, insurance claims on the run replacement, and lower finance costs following the redemption of the unrated junior sukuk musharakah in FY15. - Bernama