JAKS gaining despite locals’ claims

JAKS’ power plant in Hai Duong province began first-unit operations in November

According to JAKS’ third-quarter unaudited results for the period ending September 30, 2020, its construction division contributed revenues of RM66.4 million ($16.45 million) and profit before tax of RM8.7 million ($2.16 million). In addition, its Vietnamese engineering, procurement, and construction (EPC) works contributed to 82 per cent of the division’s revenue compared to 79 per cent in the preceding year’s corresponding quarter.

JAKS’ revenue for the third quarter reached a total of RM213.4 million ($52.86 million) in which Vietnamese assets contributed a majority of the figure at RM155.1 million ($38.4 million), and the remainder coming from Malaysia.

At the end of the last fiscal year JAKS achieved a significant milestone in breaching the RM1 billion ($247.7 million) mark in revenues, 59.8 per cent higher on-year.

The construction division was the largest contributor to the group’s revenue with RM1.03 billion ($255.1 million), whilst its profit before tax was RM162 million ($40.1 million). Out of these, the Vietnam EPC contract contributed revenues amounting to RM817.6 million ($202.5 million) and a profit before tax of RM191 million ($47.3 million).

The group’s 1,200MW build-operate-transfer (BOT) power plant in the northern province of Hai Duong is its first foray in Vietnam, taking the form of a joint development with China Power Engineering Consulting Group Co., Ltd.

Construction of the facility began in 2016, with Golden Keen Holdings, a wholly-owned subsidiary of JAKS, also securing a $454.5 million EPC contract for the plant.

The first unit of JAKS Hai Duong commenced operations at the end of November, with the second unit scheduled for completion in the second quarter of 2020.

It is expected to generate recurrent concession earnings from power generation from next year onwards to cover the depletion in revenue after completion of the EPC construction works there, according to JAKS.

The facility has allegedly caused sleepless nights for those living next to the coal-fired plant, with VIR discussing the situation with affected local people last month. Some claimed that thick dust emanating from the power plant was continuously covering nearby streets, trees, and homes.

JAKS has yet to provide a comment on the situation.

JAKS was initially engaged in water supply and infrastructure construction projects, along with supply and trading of building materials and steel-related products. The company subsequently expanded into property development of mixed residential and commercial development with strategically-located schemes in the Malaysian city of Petaling Jaya. Since then, the group has diversified into power generation and other large-scale infrastructure projects, such as that seen in Hai Duong.