KUALA LUMPUR: Cypark Resources Bhd is expected to incur a wider net loss of RM37 million in the financial year 2024 (FY24), according to Maybank Investment Bank Bhd (Maybank IB).
In a note, the investment bank said this is due to its weak third quarter ended January 31, 2024 (3QFY24) results.
"We, however, raised the FY25 estimated net profit by 117 per cent as we now expect the construction of the private hospital project to be completed in mid-June 2024 (previously January 2024)," it noted.
Maybank IB added that there is no change to the company's engineering, procurement, construction, and commissioning (EPCC) job win forecasts.
It has assumed RM150 million of EPCC order book replenishment in the FY25 and FY26 estimates, respectively, with none in FY24.
The investment bank has maintained a "hold" call on Cypark, with an unchanged target price of 86 sen.
Cypark's core net loss for the third quarter of FY24 widened quarter-on-quarter to RM9.5 million, which is a 96 per cent increase.
This excludes the RM5.5 million impairment on trade receivables and the RM21 million one-off waste-to-energy (WTE) amortisation due to changes in the concession term.
Waste management and WTE recorded a pre-tax loss of RM33 million (including a one-off amortisation cost) due to the rainy season in Negeri Sembilan, which affected the moisture level of waste, leading to lower plant efficiency.
Meanwhile, Cypark's construction operations experienced underdelivery, with revenue declining by 82 per cent quarter-on-quarter.
This was attributed to slower work progress on the 10-storey private hospital project for Selgate.
Year-to-date revenue recognised for the project amounted to RM21.9 million, out of the full contract sum of RM108.8 million.
As Cypark focuses on completing its large-scale solar (LSS) projects, it is also exploring new renewable energy (RE)-related opportunities in solar and WTE.
In December 2023, Cypark entered into a memorandum of understanding (MoU) with Abu Dhabi Future Energy Company (PJSC) to collaborate on RE projects in Malaysia.
The partnership will explore various initiatives, including the development of a battery energy storage system (BESS), with the goal of establishing a 1 gigawatt (GW) project in Malaysia.
Cypark is also looking at Sarawak to expand its RE operations.