YTL Power Forced To Seek New Avenue For Future Earnings Growth, Says Affin Hwang

In a statement today, Affin Hwang said YTL Power International Bhd was forced to seek new avenues for future earnings growth, pressed by the net-zero carbon emissions agenda which is putting strain on the demand for conventional coal-fired power plants.

“Major lending countries like Japan, South Korea, and China have also stated that they will no longer provide loans for new coal-fired power plants.

“Hence, there is a high likelihood that YTL Power’s 80% owned 1,320MW Tanjung Jati A coal-fired power plant in Indonesia is unlikely to achieve financial close in the near term,”  Affin Hwang says.

YTL Power, on the other hand, can maintain a dividend per share (DPS) payout of 5.0 sen despite the massive capital expenditure (capex) required for its upcoming data centre park, which is expected to cost around RM10 billion to RM12 billion, according to Affin Hwang.

“This provided that the data centres would be built in phases and YTL Power still has a cash balance of around RM6 billion on its balance sheet,” Affin Hwang says.

“YTL Power intended to develop the 664 hectares it recently acquired into a data centre park, with 300 megawatts (MW) of green data centre capacity and 500MW of solar power by 2030,” it says.

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