Rising Maintenance Costs in Power Segment Drive 22% Decline in Ranhill’s Q2 Net Profit

KUALA LUMPUR (August 26): Ranhill Utilities Bhd’s net profit for the second quarter ended June 30, 2022 (2QFY22) fell 22.65% to RM7 million from RM9.05 million in the same period l year despite quarterly revenue growth of 25.37% to RM458. 38 million RM365.61 million a year ago.

The group blamed the drop in net profit mainly on recognition of higher maintenance costs by its energy segment after a planned outage for an Occupational Safety and Health Department inspection and turbine maintenance steamed.

The revenue growth for the quarter was due to increased revenue in the group’s services segment, contributed by the newly acquired subsidiaries, namely Ranhill Bersekutu Sdn Bhd and Ranhill Worley Sdn Bhd (RWSB), which were not acquired only in the third quarter of 2021.

Earnings per share were reduced to 0.54 sen from 0.85 sen previously, its filing in Bursa Malaysia showed on Friday (August 26).

On a quarterly basis, Ranhill’s net profit slipped slightly by RM7.38 million despite revenue increasing by 16.51% from RM393.42 million in 1QFY22.

For the year-to-date first six months ended June 30, 2022 (1HFY22), Ranhill’s net profit decreased by 12.04% to RM14.38 million from RM16.35 million despite rising 16, 78% of 1HFY22’s revenue to reach RM851.8m from RM729.38m.

Looking ahead, Ranhill said initiatives to explore an opportunity to expand water supply operations to other states in Malaysia are still being actively sought, based on the “asset-light” model and the group’s success in operating water supply services in Johor for over 20 years. , since 1999.

Its subsidiary, Ranhill SAJ Sdn Bhd, will continue to accelerate pipeline rehabilitation and replacement work to further reduce non-revenue water (NRW) in the future.

Meanwhile, Ranhill SAJ will continue to focus on the construction of new water treatment plants (WTPs) and the upgrading or expansion of existing WTPs, as well as the rehabilitation of pipelines across Johor.

Ranhill’s services business will also engage in providing expertise related to engineering, procurement and construction management (EPCM) for the oil and gas sector, operation and maintenance of end-of-life industrial assets.

EPCM services also include contract for ExxonMobil work package preparation, material management, construction planning and reporting, and offshore field engineering services for ExxonMobil’s offshore assets.

To that end, Ranhill said the service sector will also explore enhanced oil recovery projects, essentially the revitalization of marginal oilfields.

“Many offshore assets in Malaysia are reaching end of life and with that there is [opportunities] for Ranhill to offer its operation and maintenance solutions.

“Ranhill, through RWSB, can leverage the world-class technical expertise and skills of the Worley Group, a recognized industry leader for engineering and design work in the oil and gas sector. .

“Specifically, Worley has proven abilities to successfully revitalize marginal oilfields in the UK,” he said.

In addition, the group also intends to bid on projects where its technical capabilities and industry experience can provide distinctive value and strategic advantage to project owners.

Shares in Ranhill finished one sen or 2.25% lower at 43.5 sen, giving the group a market capitalization of RM563.7 million.

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