Kuala Lumpur, Feb 26 – Malakoff Corporation Bhd (MALAKOF) is navigating operational and financial challenges, with analysts making downward revisions to earnings forecasts due to rising profit rates on its perpetual sukuk. However, the company’s growth initiatives, including an upcoming acquisition and tariff adjustments, offer potential upside.
Key Malakoff Takeaways from Analyst Briefing
Apex Research analysts noted that despite scheduled outages impacting the equivalent availability factor (EAF) to 59% in 4QFY24, the Tanjung Bin Energy (TBE) plant’s unplanned outage rate (UOR) remains at 5.08%, still below the 6% threshold that would trigger financial penalties.
Additionally, Malakoff is working to mitigate negative fuel margins through provisions for coal prices based on net realizable value (NRV). The company’s concession business tariff is due for a revision in September 2025, which could offer some revenue relief.
One of the key near-term catalysts for Malakoff is the expected completion of its E-Idaman acquisition next week, marking its expansion into the waste management sector.
Financial Adjustments & Lower TP
Given the rising profit rate environment, Malakoff is actively exploring refinancing options for its perpetual sukuk to manage costs. Analysts have revised their earnings estimates downward for the next three years:
• FY25: -3.9%
• FY26: -7.0%
• FY27: -8.8%
Following these adjustments, Apex Research has lowered its target price (TP) for Malakoff to RM0.94 (from RM0.96) but maintained a BUY recommendation, citing the company’s long-term fundamentals and potential tariff adjustments.
Analyst Take
Apex Research analysts stated, “The near-term earnings pressure from higher sukuk costs is manageable, and Malakoff’s ability to optimize its debt structure will be key. The E-Idaman acquisition could also contribute positively, diversifying its earnings base.”
While the stock faces short-term headwinds, its strategic moves in refinancing and expansion could support long-term value. Investors will be watching the completion of its acquisition and future tariff revisions for further clarity on its earnings trajectory.
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