KAB eyes strong future earnings as sustainable energy biz lifts its quarterly profit to fresh-high

KINERGY Advancement Bhd (KAB) (formerly Kejuruteraan Asastera Bhd) has reported its strongest-ever quarterly net profit in its 3Q FY2023 ended Sept 30, 2023 with a boost from its sustainable energy solutions (SES) business.

The feat was achieved as the one-stop energy and engineering solutions provider benefitted from a strong increase in energy tariffs, new revenue streams and a gain from a recent acquisition.

KAB saw its net profit surged by nearly 19-fold to RM20.36 mil during the period under review from RM1.05 mil a year ago. The SES segment has maintained an impressive growth trajectory by raking in a revenue of RM12.88 mil or a significant rise of 254.8% from RM3.63 million registered in 3Q FY2022.

KAB’s recent acquisition of PT Inpola Mitra Elektrindo a mini-hydropower plant has also substantiated a gain which lifted the group’s bottom line. Among other contributing factors, the steep rise in electricity tariffs has also enabled KAB to reap additional gain from its existing assets as well as new power assets.

The contribution from its core SES segment is further stabilised through the group’s strengthened recurring income. Meanwhile, the new power assets of KAB comprised a solar farm facility in Universiti Teknologi Malaysia (UTM) Kuala Lumpur and a mini-hydro plant in Indonesia.

Following the stellar results in 3Q FY2023, KAB’s net profit for the nine-month period ended Sept 30, 2023 jumped almost 11-fold to RM26.14 mil from RM2.28 mil in the previous corresponding period. However, there was a slight dip in revenue to RM136.46 mil from RM143.92 mil in 9M FY2022.

Datuk Lai Keng Onn

“The management’s strategy in shifting our focus from mechanical and electrical (M&E) engineering works in construction and property projects to higher-margin sustainable energy solutions have started to bear fruit,” commented KAB’s executive deputy chairman-cum- group managing director Datuk Lai Keng Onn.

“For the full-year 2023, we are poised to achieve our best financial performance since the pre-pandemic year of 2019. We are also on track to meeting our operational objectives and ESG (environmental, social and governance) sustainability targets.”

Moving forward, KAB is actively expanding its client base in the energy landscape as it pushes forward with its penetration into ASEAN markets by offering high growth potential and value-added sustainable solutions to businesses.

“We are very pleased to have recently completed the acquisition Future Biomass Gasification Sdn Bhd, a biogas plant located in Kedah,” revealed Lai.

“Year-to-date (YTD), we have successfully added three significant assets into our portfolio, namely, solar, mini-hydro and biogas plants that will provide sustainable earnings and transform us into a holistic technical expert for a wide array of sustainable energy solutions.”

According to Lai, the group’s specialist capability has been recognised by PETRONAS which awarded it with two engineering, procurement, construction and commissioning (EPCC) contracts this year alone.

On Nov 6, PETRONAS appointed KAB to provide RM33.30 mil in EPCC for utility expansion and energy infrastructure enhancement of its LNG carrier’s transformation to floating storage units at Pengerang.

“This award strengthens our position within the sustainable energy space and our reputational capabilities as a one-stop energy and engineering solutions provider capable of delivering competent standard services and solutions to clients,” justified Lai.

“We hope to replicate our success with more job wins in the sustainable energy space in the future.”

At today’s mid-day trading break. KAB was up 0.5 sen or 1.54% to 33 sen with 247,000 shares traded, thus valuing the company at RM642 mil. – Nov 21, 2023

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