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 SLVEST 0215 SOLARVEST HOLDINGS BERHAD starts off FY23 with record high 1Q

KUALA LUMPUR (Aug 29): Solarvest Holdings Bhd's net profit for the first quarter ended June 30, 2022 (1QFY23) soared to RM4.33 million from RM174,000 in the same period last year, as construction activities continued to pick up following the country's transition to the endemic stage of Covid-19.

The latest quarterly profit is also the group's highest 1Q profit since the group's founding. Quarterly revenue jumped 131.47% to RM52.66 million from RM22.75 million, its Bursa Malaysia filing showed.

Earnings per share rose to 0.64 sen from 0.02 sen. No dividend was declared.

Compared with the preceding quarter of 4QFY22, Solarvest's net profit grew 16.57% from RM3.72 million, despite lower revenue, as the completion of design and engineering works for certain large-scale solar (LSS) projects recorded better profit margins. But top-line contributions from LSS projects dropped, which dragged revenue down 31.91% from RM77.34 million.

As at June 30, 2022, Solarvest's unbilled order book stood at RM727 million, which will be progressively recognised in FY23 and FY24, the group said.

"The group remains upbeat on the industry outlook, underpinned by a robust job pipeline in private large-scale power plants, residential, commercial and industrial projects," it added.

Separately, the group said it has been notified by the Energy Commission that the 21-year power purchase agreements (PPAs) for all three of the projects it was awarded under the fourth cycle of the LSS scheme (LSS4) have been extended by four years to 25 years. The commercial operation dates for all three have also been deferred to Dec 31, 2023.

"The new measures announced by the Energy Commission are good news to us and the industry at large. The prolonged PPA will offset some of the cost pressure we are facing and improve the internal rate of return of our solar assets. Regarding the extended SCOD (scheduled commercial operation date), we are still targeting to complete two of the projects by March 2023. In other words, we can expect revenue contribution from electricity sales to markedly increase in FY24, paving our way towards the 30% recurring income target," said Solarvest executive director and chief executive officer Davis Chong Chun Shiong.

"Looking ahead, we believe that there is ample room for growth in Malaysia. Earlier, the prime minister indicated the introduction of a virtual power purchase agreement (VPPA) concept with an initial quota of 600 megawatts (MW) in the fourth quarter of 2022. This is an encouraging first step towards a more liberalised energy market which also bodes well for Solarvest," Chong added.

Chong was referring to the announcement by Prime Minister Datuk Seri Ismail Sabri Yaakob on the same day that corporate companies would have the new option to procure green electricity supply via the concept of VPPA, which would start in the fourth quarter of 2022, with a 600MW quota offer.

Solarvest's share price settled seven sen or 8.43% lower at 76 sen on Monday (Aug 29), bringing the group a market capitalisation of RM507.3 million.

http://www.theedgemarkets.com/article/solarvest-starts-fy23-record-high-1q

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