Ranhill announced this week that it has been awarded the 100 megawatt gas fired power plant at Kimanis, Sabah in which 60% of its owned consortium was bidding for.
The tenure is for 21 years, with expected commissioning in Mar 2026. This raises Ranhill’s generation capacity in Sabah to 480 megawatt from 380 megawatt.
“Assuming a RM600 mil cost and at high single-digit project internal rate of return, we estimate a mere c.2sen/share accretion to our stock option price,” said Maybank Investment Bank Bhd (MIBB) in a recent report.
Internal rate of return is the discount rate that makes the net present value of all cash flows equal to zero in a discounted cash flow analysis.
Ranhill has declared a second interim cash dividend per share of 2.0sen for financial year 2022. This brings the full-year dividend per share to 2.5sen, representing a 33% payout. Note that Ranhill’s financial year 2022 net profit was boosted by a sizable non revenue water incentive.
Non revenue water is the term describing water that is pumped and then lost or unaccounted for. As highlighted previously, the resumption of cash dividends for Ranhill in financial year 2022 is a much-welcome move, in MIBB’s view.
