Malakoff earnings to normalise on TBP restart

PETALING JAYA: Malakoff Corp Bhd’s net profit is expected to normalise in the second half of financial year 2026 (2H26) as its Tanjung Bin Power Plant (TBP) resumes full operations in the third quarter (3Q26).

AmInvestment Bank Research forecasts a net profit of RM50mil to RM60mil for the independent power producer in 2H26, barring any forced outage.

TBP’s steam turbine rotor is currently undergoing testing in the United Kingdom.

It will be shipped to Malaysia from Germany in 3Q26.

In 1Q26, there had been a failure in TBP’s steam turbine rotor.

“Currently, we believe that TBP is operating at two-thirds of its full capacity.

“The Tanjung Bin Energy (TBE) power plant is also envisaged to be fully operational in 2H26 as the Lines A and B conveyor belts have been fully repaired as of early July,” AmInvestment Bank Research further pointed out in a note.

“About 75% to 80% of Malakoff’s net profits are from the sale of electricity,” the research house estimated.

The balance 20% to 25% are from waste management.

Malakoff manages waste for Kuala Lumpur, Putrajaya and Pahang via Alam Flora.

According to AmInvestment Bank Research, operational issues faced by Malakoff are to be resolved in 2H26.

With the conveyor belts fully repaired, coal can now be transported to TBP and TBE using conveyor belts instead of transhipments via the sea.

“As such, we think that TBP and TBE’s equivalent availability factor would normalise to 90% each in 2H26 from 37% and 67% in 1Q26, respectively.”

The research house also expects Malakoff’s capacity income to improve in 2H26.

This is anticipated to be driven not only by TBE and TBP, but also by the extension of the Prai Power Plant’s power purchase agreement (PPA).

It is worth noting that the PPA has been extended from April 1, 2026, to March 31, 2030. Prai is estimated to generate capacity payments of approximately RM20mil per quarter.

TBP’s quarterly capacity payments are around RM250mil per quarter, while TBE’s are roughly RM160mil.

Conventional power generation aside, Malakoff’s exposure in the renewable energy space is also growing.

The capacity exposure has risen to 768 megawatts (MW) from 198MW early last year.

Despite the positives, AmInvestment Bank Research maintained its “hold” call on the stock, pointing out that its operational track record is weak.

Furthermore, the target price is set at 90 sen per share.