Water concessionaire Puncak Niaga Holdings Bhd is expected to register a loss this financial year following the adoption of a new accounting treatment that requires certain charges to be capitalised as intangible assets and amortised.
Managing director Datuk Hashim Mahfar said in a statement yesterday that the IC Interpretation 12-Service Concession Arrangements, which were retrospective, had also resulted in a drop in shareholders' funds from RM1.5bil to RM35.6mil.
However, Puncak Niaga has obtained a conditional waiver from being categorised a PN17 company until the announcement of its second-quarter results for the period ending June 30, 2012.
(Under Bursa Malaysia rules, that would have been the case if a company's shareholders' funds fell below RM40mil).
For the quarter ended March 31, Puncak Niaga reported a group net loss of RM29.6mil, of which RM8mil was attributable to shareholders.
This was mainly due to higher operating costs as a result of higher allocation of water purchasing cost to the income statement and greater finance cost as a result of notional interest arising from the notional liability.
(For the annual, land use and fixed capacity charges that have been amortised, a corresponding amount is credited as concession liability and subject to notional interest which is charged to the income statement).
“Despite the loss, Puncak Niaga's business viability and cashflow is not affected as the new accounting treatment does not result in additional utilisation of cash resources.
“The consolidated shareholders' profit is expected to be self-regularised, with the company showing a profit, with the recognition of a scheduled tariff hike of 25% in 2012 (amounting to RM400mil per year on a higher base) under the terms of the concession agreement between 70%-owned Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) and the Federal and Selangor State Governments,'' said Hashim.
The company has recognised the earlier scheduled tariff hike of 37%, which comes up to RM400mil per year, even though it has not received the money from the State Government.
The contentious issue is now before the court following Puncak Niaga's suit for compensation for 2009.
Puncak Niaga's acquisition of a 40% stake in Global Offshore (M) Sdn Bhd and KGL Ltd is expected to be completed by the end of June and start contributing by the year-end. By next year, Puncak aims to own 100%, according to earlier reports.
Last year, the two companies, which run an existing offshore installation contract, recorded revenue of RM297mil. In its ambition to be an integrated offshore player, Puncak Niaga is likely to look for more upstream expansion in offshore work and vessel management.
On the RM667.3mil rural water supply project, Puncak Niaga was looking at a 10% margin on a 28-month job secured together with Quality Concrete Holdings Bhd, sources said.
In total, the Puncak Niaga group has issued RM3bil worth of bonds which have become financially troubled and are being taken over by the Federal Government via Pengurusan Aset Air Bhd.
Reports indicated that the Federal Government was likely to come up with a holistic solution when restructuring the bonds.-THESTAR
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