JAKS Resources Bhd will see a recurring income totalling over RM720 mil per annum over the next 25 years from its upcoming power plant in Vietnam, according to JAKS’ CEO Andy Ang.
The Jaks Hai Duong Power Plant which will comprise of two 600MW units, will see the first unit come online some time in Oct 2020, ahead of the original timeline of Nov 2020.
“As it stands, the first unit is already generating electricity, but no revenue is recognised as it is still in the testing and commissioning phase at the moment.”
“The second unit is due six months after the commencement of operation date of the first unit, and is expected to be done in 1Q21,” said Ang to FocusM.
He also shared that a power plant generating 1200MW can easily see a revenue of US$600 mil to US$700 mil a year, which comes to between RM2.4 bil to RM2.8 bil. With JAKS owning 30% of the power plant, this translates to a revenue of about RM720 mil a year, which should be recognised in the second half of 2020.
“We also have the option to increase our stake in the power plant by a further 10%, and we are already working on exercising this option,” said Ang.
This also leads to JAKS looking forward to a better 2H20, after bearing the brunt of the Covid-19 pandemic in 1Q20.
“Our construction partners in Vietnam were largely from Mainland China, and they had gone back to celebrate the Lunar New Year. The Vietnamese government was also quick to react to the Covid-19 pandemic, leading to our construction partners being unable to get back to the job site.”
“This saw construction starting to slow down after the Lunar New Year. However, we received a special permit from the Vietnamese government in 2Q20, which allowed us to continue most of the work,” said Ang.
At the end of the trading day, JAKS’ shares were last done at 76 sen, down half a sen, with 2.1 million shares traded. – Sep 8, 2020
