By the close of trading, the counter had pared its loss to 72.5 sen, a 2.5 sen or 3.33% drop from its closing price on Friday, valuing the group at RM567 million.
For the financial year comprising a period of 18 months (18M FY2023), Cypark recorded a net loss of RM242.01 million due to a kitchen sinking exercise which saw impairment losses amounting to RM376.5 million for the latest quarter (Q6 FY2023).
In a Bursa filing in January, the company announced a change in its financial year end from Oct 31, 2022 to April 30 this year.
The quarterly loss includes a one-off provision for potential liability due to delays in existing projects, and impairments including outstanding receivables and intangible assets for its waste-to-energy (WTE) project in Ladang Tanah Merah, Negeri Sembilan.
This came about after Cypark delayed the commercial operation dates of this WTE project and another floating solar plant in Tasik Danau Tok Uban, Pasir Mas, Kelantan, even as doubts were raised over the viability of its renewable energy assets.
Public Investment Bank (PublicInvest) said Cypark’s WTE facility at Ladang Tanah Marah started its commercial operations in December 2022 and generated revenue since Q5 FY2023.
“However, revenue contribution from sale of the plant’s green energy for the full period Q6 FY2023 came in at only RM9.2 million due to sub-optimal operations during the initial stages,” it said in a note today.
Stripping out the impairments, PublicInvest said Cypark posted a net profit of RM74.2 million for the latest quarter versus RM3 million in the preceding quarter, lifted by a one-off deferred tax asset reversal amounting to RM83.5 million.
The bank remains cautious over Cypark’s outlook, given its sub-optimal WTE plant operations, and delays in commissioning various other key projects.
Change of auditor
Earlier this year, Cypark appointed a new auditor – Nexia SSY PLT – to peek into its books. According to a Bursa filing on May 5, the company – which was in the midst of its financial year – engaged a new auditor who was expected to propose impairment charges totalling RM376 million.
These charges included a provision of RM91 million resulting from liquidated and ascertained damages, an impairment of RM180 million for intangible assets, contract assets, and receivables, and an additional RM105 million for extended costs related to project completions.
PublicInvest said Cypark’s commercial operation date for the large solar scale 3 Danau Tok Uban (LSS3 DTU) project has been pushed back to the later part of 2023, causing a delay from the previously guided May 2023 deadline.
“As a result, the company may face additional expenses and be unable to generate operation and maintenance revenue from LSS3 DTU, thereby impacting its financial stability, liquidity, and potentially affecting the availability of working capital for upcoming projects,” it added.
Cypark’s current largest shareholder is Jakel Group’s investment arm Jakel Capital Sdn Bhd, which holds a 22.58% stake, while Chung Chee Yang is the second-largest shareholder with a 9.9% stake, followed by Socso (6.39%) and Cypark founding CEO Daud Ahmad (5.41%).