Solarvest hits highest-ever 1Q earnings

SOLARVEST Holdings Bhd had a good run for the first quarter ended June 30, 2022 (1Q23). 

It posted a record net profit of RM4.33 million for the 1Q of its new financial year, from just RM174,000 in the same period last year, underpinned by construction activities which continued to pick up following the country’s transition to the endemic stage of Covid-19. The quarterly profit was the group’s highest 1Q earnings since the group’s establishment. 

Quarterly revenue jumped 131.47% to RM52.66 million from RM22.75 million, while earnings per share rose to 0.64 sen from 0.02 sen, according to its exchange filing. 

For the financial year ended March 31, 2022 (FY22), the company posted a net profit of RM6.91 million, less than half of RM16.14 million in FY21, on the back of RM177.75 million in turn-over (FY21: RM224.29 million). 

Commenting on the group’s financial performance, group CEO and ED Davis Chong said the record high net profit achieved in 1Q23 was primarily attributed to the easing of restrictions. 

“As such, our clients have gradually opened their facilities up for us to conduct solar photovoltaic installations. In sum, there were fewer operational disruptions and cost structure implications compared to the year before,” he said. 

Out of the RM52.7 million revenue obtained in 1Q23, the engineering, procurement, construction and commissioning (EPCC) of solar energy solution segment contributed RM50.8 million or 96.5% of the group’s total revenue. The remaining RM1.8 million were split between operations and maintenance (O&M) of solar energy systems, sales of electricity through solar energy and other activities. 

Chong said it is also worth mentioning that the O&M of solar energy system is gaining traction in which the segment has consecutively surpassed the RM1 million mark in revenue for the past three quarters. 

He expressed that it is a good indication of the increasing recurring earnings of Solarvest. 

In a research note released on Aug 29, Maybank Investment Bank said it expected an earnings recovery in FY23E, when the majority of the company’s outstanding orderbook is expected to be recognised. “We believe a positive outcome for its 140 megawatts tender in Taiwan would also provide upside potential to earnings, expected to be known in the second half of FY22,” it said. 

On the flip side, it said slower-than-expected work progress for its EPCC works may affect the timing of earnings recognition while increase in price for solar panels and inverters could negatively affect its solar project margins. — TMR

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