Cypark Resources saw its 4QFY24 headline net loss of MYR66m bringing its full year FY24 net loss to MYR110m. Ex-one-off, core loss was MYR22m for 4Q, and MYR44m for full year, above consensus net loss forecast of –MYR37m/-MYR35m respectively. Maybank said the miss was due to a higher-than-expected cost incurred at Renewable Energy and WTE segments. The house adjusts its FY25/26E core net profit by -65%/+59%, and introduce FY27E. Maintain HOLD with lower SOP-TP of MYR0.83 (-3sen).
Losses at WTE and RE ops offset profits
FY24 group revenue made up 93% of forecast with significant QoQ pickup in construction rev. in 4Q from a hospital construction project. Renewable Energy and WTE rev. were lower in 4Q (-4% and -5% respectively), on lower contribution from LSS construction revenue and lower sale of green energy at WTE due to an unexpected fire incident that took place at the end of Apr. Bottom-line, both RE and WTE ops recorded pre-tax loss in 4Q, on higher administration costs, particularly professionalfees and maintenance costs. Group tax was exceptionally high in 4Q due to one-off derecognition of the deferred tax assets of MYR46m
Cautiously optimistic for FY25E
Into FY25E, the completion of LSS3 project located in Terengganu that achieved COD on 9 June 2024 will contribute positively to the RE op. for the next 21 years. The construction of a private hospital project still have a remaining MYR62m worth of job, to be completed in FY25E. Mayank said is is lowering the job win forecasts in FY25E to MYR100m (from MYR150m) as no new contracts secured so far; and maintain our MYR150m forecasts for FY26/27E respectively. For waste management & WTE op., Maybank said it expects the first revision on tipping fees to be announced by 3QCY24E. A hypothetical MYR1/mt/day increase in tipping fees could generate around MYR300k additional rev. for the segment annually.
Exploring new EPCC jobs in solar and WTE
Currently, Cypark operates, owns, and/or manages c. 261MWp of RE assets (incl. a 171.8MWp LSS3 project in Terengganu which was completed in Jun 2024), and expects to increase its RE asset capacity to c.358.9MWp by end2024. Cypark is also exploring new RE related opportunities in solar and WTE, with a capacity target of 800MW by 2027E.
