Ranhill’s Increased Payout And Future Expansions Signal Good Prospects

Ranhill announced a second interim dividend of 2 sen per share for financial year 2022, which brings total financial year 2022 dividends to 2.5sen per share representing an attractive 4.9% yield. This marks a solid reversion to cash dividends from share dividends previously. 

Further on, the increased payout signals optimism on cash flows on the back of the recent non revenue water grant award and earnings acceleration from Ranhill SAJ’s recent tariff hike, said MIDF Research (MIDF) in the recent Corporate Update Report.

Non revenue water is the term describing water that is pumped and then lost or unaccounted for. This latest development is a positive, reflecting a reacceleration in dividend payout and a reversion to cash dividends. Broadly, RHB continues to favour Ranhill for its earnings expansion prospects.

Take for example the expansion into Indonesia source-to-tap water supply with an output of 605 million litres per day. Then there is the LSS4 project that is expected to reach commercial operation date by December 2023 and the completion of the Sabah West-East grid upgrade which should drive higher dispatch from Ranhill Powertron1 and Powertron 2 to Sabah’s East Coast. Note also the potential water tariff hike for the domestic sector and the potential participation in the Corporate Green Power Program. 

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