KUALA LUMPUR (BERNAMA) – JAKS Resources Bhd is expected to register a core net profit of RM94.6 million and RM96.9 million for the financial years ending December 31, 2021 and 2022, said Rakuten Trade Research.
The research house said in a note yesterday that the company’s earnings are expected to be stronger in the coming quarters reflecting the full contribution from its power plant in Hai Duong province, Vietnam, which is anticipated to provide recurring income for the next 25 years.
JAKS is primarily engaged in water supply and infrastructure construction projects, property development in Malaysia, as well as power generation in Vietnam.
“The Vietnam power plant is expected to provide revenue of USD600 million per annum.
“However, operations in Malaysia remain sluggish due to the reimplementation of the Movement Control Order (MCO 3.0) and the weak construction sector, ” it said.
The power plant’s concession is held by a joint venture (JV) firm JAKS Hai Duong Power Company Ltd, which is 30 per cent owned by JAKS and 70 per cent by China Power Engineering Consulting Group Co Ltd.
The plant comprises two 600MW coal-fire thermal units with a project cost of USD1.87 billion.
Under a 25-year power purchase agreement, JAKS Hai Duong will be guaranteed fixed capacity payments by the government of Vietnam and backed by an energy payment to cover variable costs, including fuel and variable operating costs.