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Regional clean energy expert, Solarvest Holdings Berhad (“Solarvest” or the “Group”) has today announced its first quarter financial results for the period ended 30 June 2024 (“1QFY25”).
In 1QFY25, Solarvest reported a profit after tax and non-controlling interest (“net profit”) of RM7.8 million, marking a 17.0% year-on-year (“YoY”) growth from RM6.7 million recorded in the preceding year’s quarter ended 30 June 2023 (“1QFY24”). This growth is driven by stronger performance and improved margins in the commercial and industrial (“C&I”) 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 1QFY25 from 4.7% in the previous year.
Revenue for the quarter stood at RM 72.7 million, as compared to RM143.4 million last year, primarily due to the completion of all LSS4 projects, which are inherently seasonal. With that, the Group anticipates CGPP EPCC projects will start reflecting in revenue in the coming quarters.
Solarvest’s 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 9.0% in 1QFY25 from 0.5% last year. The segment grew over nine-fold YoY to RM6.6 million from RM0.7 million in the previous year, due to the successful commissioning of three Group-owned LSS4 assets.
Additionally, Solarvest’s commitment to exploring new sustainable solutions is evident in the significant growth of other segment—comprising solar project development, environmental commodities trading and other green energy solutions. The segment grew to RM4.6 million in 1QFY25 compared to RM0.4 million in 1QFY24, contributing 6.3% to total revenue, up from 0.3% last year. Meanwhile, the operations and maintenance (“O&M”) of solar energy systems segment accounted for the remaining 2.2% of revenue, totalling RM1.6 million.
Executive Director and Group Chief Executive Officer of Solarvest, Mr. Davis Chong Chun Shiong (???) said, “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. 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 RM23 million over the next 25 years. Followed by Solarvest’s financing program, Powervest, we have secured multiple corporate Power Purchase Agreements (“PPAs”) totalling 100 MWp capacity that are expected to generate RM42.7 million 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 at 31 July 2024, Solarvest’s unbilled EPCC order book stood at RM469 million, which will be progressively recognised in FY25 and FY26. Looking ahead, Solarvest 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 program, pursuing both ownership and development opportunities alongside EPCC projects.
Furthermore, under the CGPP where Solarvest and its consortiums have been awarded a 90 MWac export capacity by the Energy Commission of Malaysia, the Group has recently signed five Corporate Green Power Agreements (“CGPAs”) totalling 59.98 MWac 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.
On top of the healthy revenue and orderbook pipeline, additional growth opportunities emerged as the government announced the Corporate Renewable Energy Supply Scheme (“CRESS”) kickstarting 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. It also lays a foundation for the cross-border electricity trading, accompanying with the establishment of Energy Exchange Malaysia (“Enegem”).
“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. 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,” Mr. Davis concluded.
Meanwhile, the Group is actively pursuing opportunities within its 7.77 GWp tender book comprising 5.70 GWp in Malaysia and 2.07 GWp in international markets. Solarvest remains focused on converting this robust pipeline into operational projects, driving further growth and expansion in both domestic and overseas markets. |
