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Net growth ‘driven by stronger margins in commercial segment and higher solar sales’
Malaysian green energy player Solarvest Holdings Berhad has announced its first quarter financial results for the period ended 30 June 2024 (1QFY25), with the company reporting a net profit of nearly RM8m.
The RM7.8m marks a 17% year-on-year rise from the RM6.7m recorded in the preceding year’s quarter ended 30 June 2023 (1QFY24), and the company said this growth was driven by stronger performance and improved margins in the commercial and industrial segment, and higher electricity sales contributions from the three group-owned large scale solar (LSS) 4 plants.
This led to the improved overall net profit margin of 10.8% in the period from 4.7% in the previous year.
Revenue for the quarter stood at RM72.7m, as compared to RM143.4m last year, primarily due to the completion of all LSS4 projects, which are inherently seasonal. With that, the group said it anticipates CGPP EPCC projects will start reflecting in revenue in the coming quarters.
Solarvest said its strategic focus on diversifying revenue streams and developing 30% recurring income has yielded positive results, aligning with its 5-Year Strategic Roadmap. In 1QFY25, revenue from the EPCC of solar energy solutions comprised 82.5% of total revenue, down from 98.1% in 1QFY24.
Accordingly, the electricity sales segment revenue contribution increased to 9% in 1QFY25 from 0.5% last year. The segment grew over nine-fold YoY to RM6.6m from RM0.7m in the previous year, due to the successful commissioning of three Group-owned LSS4 assets.
Additionally, Solarvest said its commitment to exploring new sustainable solutions is evident in the growth of the other segment – comprising solar project development, environmental commodities trading and other green energy solutions.
This grew to RM4.6m in 1QFY25 compared to RM0.4m in 1QFY24, contributing 6.3% to total revenue, up from 0.3% last year. Meanwhile, the operations and maintenance of solar energy systems segment accounted for the remaining 2.2% of revenue, totalling RM1.6m.
“We remain confident in achieving Solarvest’s revenue target for FY25. Of which, the revenue recognition of CGPP EPCC will significantly contributes approximately RM296 million in FY25,” said Solarvest executive director and group chief executive Davis Chong Chun Shiong.
He added: “Meanwhile, C&I projects are expected to maintain a healthy pipeline, contributing around RM50 million every quarter.
“Additionally, our strategic focus on asset development and ownership is also gaining momentum. The three Group-owned LSS4 assets are expected to generate annual electricity sales of RM23m over the next 25 years.
Followed by Solarvest’s financing program, Powervest, we have secured multiple corporate power purchase agreements totalling 100MWp capacity that are expected to generate RM42.7m annual revenue upon the projects’ completion.
“Our gradual expansion of other segment and the recurring O&M are also anticipated to maintain their growth trajectory.”
As of 31 July 2024, Solarvest said its unbilled EPCC order book stood at RM469m, which will be progressively recognised in FY25 and FY26.
Looking ahead, the company said it remains optimistic about its growing its orderbook. For EPCC, the group has already submitted bids for LSS5, which will be awarded in January 2025, with will be added to Solarvest orderbook soon.
In terms of electricity sales, Solarvest plans to replicate its successful LSS4 strategy in the upcoming LSS5 programme, pursuing both ownership and development opportunities alongside EPCC projects.
Furthermore, under the CGPP where Solarvest and its consortiums have been awarded a 90MWac export capacity by the Energy Commission of Malaysia, the group has recently signed five corporate green power agreements (CGPAs) totalling 59.98MWac with corporate consumers in August 2024.
These 21-year CGPAs are set to further strengthen Solarvest’s recurring revenue stream upon its completion by end of 2025, said the company.
It also said additional growth opportunities emerged as the government announced the Corporate Renewable Energy Supply Scheme kickstarted the new era for commercialisation of clean energy.
The anticipated introduction of a third-party access mechanism will also foster a more open energy market, enabling direct negotiations with electricity buyers and encouraging the signing of corporate PPAs, the company added. It also lays a foundation for the cross-border electricity trading, accompanying with the establishment of Energy Exchange Malaysia.
“With the opportunities presented, we are committed to achieving a 1GW clean energy asset base by 2028 through greenfield and brownfield investments across Southeast Asia,” said Davis.
He added: “As we enhance our project capabilities, we aim to lead the regional clean energy transition and deliver sustainable growth across various verticals, including solar, wind, hydropower, biogas/biomass, energy storage, energy efficiency, and the electric vehicle ecosystem.”
Meanwhile, the group said it is actively pursuing opportunities within its 7.77GWp tender book comprising 5.7GWp in Malaysia and 2.07GWp in international markets.
Solarvest said it remains focused on converting this pipeline into operational projects, driving further growth and expansion in both domestic and overseas markets. |
