KUALA LUMPUR: Ranhill Utilities Bhd’s sixth-quarter (Q6) results for financial year 2025 (FY25) came in below expectations, weighed down by higher amortisation at its Johor water operator Ranhill SAJ and widening losses in the services segment.
Maybank Investment Bank Bhd (Maybank IB) said Ranhill’s Q6 net profit of RM18 million brought its 18-month FY25 earnings to RM76 million, or 80 per cent of its forecast. Consensus estimates have yet to fully reflect the company’s change of financial year-end to June.
“The miss was mainly due to higher-than-expected amortisation at Ranhill SAJ and widening losses at the services segment. Surprisingly, no cash dividend was declared for the entire 18 months FY25,” it said.
On a quarter-on-quarter basis, Maybank IB noted that pre-tax profit of the water segment was higher sequentially as Ranhill SAJ again recognised a non revenue water (NRW) incentive of RM160 million in the quarter.
This is partly offset by a seemingly one-time amortisation charge amounting to RM92 million in relation to the previous operating period from 2021 to 2023, it said.
Meanwhile, Maybank IB said Ranhill also announced it will discontinue the pursuit of the Djuanda water supply project in Indonesia, and has impaired RM19.5 million of development cost in the quarter.
The firm has cut its FY26 and FY27 net profit forecasts by 14 per cent and eight per cent, respectively, to reflect latest depreciation and amortisation run rates, and introduce FY28 forecasts.
“We view Ranhill’s risk-reward as balanced, with the recent tariff hike largely priced-in, and the water industry’s transition to a more robust tariff framework still some time away.
“As the sole water operator in Johor, Ranhill is exposed to the JS-SEZ and data centre themes. Maintain ‘Hold’ with an unchanged target price of RM1.40.”
© New Straits Times Press (M) Bhd
