KUALA LUMPUR: Solar photovoltaics (PV) company Pekat Group Bhd posted net profit of RM5.58mil in the first half ended June 30, 2021 on the back of RM81.71mil revenue as it remained upbeat on the outlook for the industry despite the on-going pandemic.

In a statement on Tuesday, it said its revenue was contributed by the PV segment while RM15.20mil was from earthing and lightning protection (E&LP) segment and RM14.20mil was from its trading segment.

“Profit before tax for the current financial period was at RM7.4mil after the deduction of administrative expenses of RM12.7mil which mainly consist of staff related expenses and finance costs of RM500,000 which mainly consist of interests charged by financial institutions for trade facilities,” it said.

However, when compared with 1Q, it said revenue decreased by RM1.6mil or 3.9% to RM40.05mil from RM41.7mil due to the impact from the nationwide lockdown imposed by the government from early June 2021, which had affected the projects’ execution in the last month of the current financial quarter.

Pekat said profit before tax fell by RM4.4mil or 75% to RM1.5mil from RM5.9mil in 1Q due to a decline in the gross profit margin from 28.4% to 20.5% in the current financial quarter.

“This was mainly attributable to lower gross profit margin recorded from solar PV projects as a result of the recent hike in material costs of solar PV modules. The increasing competition within the solar PV and the E&LP industry had also led the group in reducing its pricing in order to remain competitive and be in line with the prices offered by its competitors.

“In addition, an associated company had incurred loss which further decreased the group’s profit for the current financial quarter,” it said.

Pekat said the outlook of the solar PV industry in Malaysia remains positive following the government’s initiatives in extending the green technology tax incentives to 2023 and setting a target of reaching 31% of renewable energy in the national installed capacity by 2025.

The recent announcement of the RM42.2bil foreign direct investment (FDI) by a Chinese solar panel manufacturer reflected the government’s commitment in the solar energy industry in Malaysia and the increasing trend of solar energy among the other renewable energy options.

“The group has set foot in targeting for broader customer base in its solar PV segment. In addition to the existing customer mix which comprises mainly of EPCC industrial and commercial projects, the group also provides installation of solar PV systems to household customers following the government’s introduction of Net Energy Metering Rakyat programme with a quota allocation of 100MW until 2023.

“The various packages for homeowners introduced by the group are expected to contribute positively to the existing group’s revenue streams,” it said.

For the 1H, the group’s unbilled order book amounted to RM163.8mil which will contribute to the group’s revenue for the financial years to come.