Bus iness Overvi ew 01 Sect ion 18 Ranhi ll Ut i l i t i es Berhad OUR APPROACH TO VALUE CREAT ION CCGT Power Generation Air Inlet Heat Recovery Steam Generator Low Pressure Exhaust Steam High Pressure Steam Feed Water Exhaust Air Fuel - Natural Gas Air Out Air In Combustion Chamber Generator Gas Turbine Electrical Grid Pump Generator Exhaust Gas to Atmosphere via Stack Compressor Air Cooled Condenser Steam Turbine CAPITAL DEPENDENCIES WATER RESOURCES PRESERVATION The Group’s Environment sector comprises the abstraction, treatment and supply of potable water to the state of Johor, Malaysia. Operations also include addressing non-revenue water (“NRW”) with its effort, of which Johor state has the lowest NRW rate in Malaysia based on m3/KM of Pipe/ Day. The Environment sector also undertakes wastewater treatment and reclamation of wastewater in Thailand. Given that a large portion of Ranhill’s revenue is presently derived from environment sector revenues, it is evident that the Group’s business is dependent on sustainable water supply from the state’s rivers. However, amidst increasing water consumption due to population growth and rapidly expanding industrial and commercial activity as well as economic development, together with climate change and other environmental impacts, rivers across the state continue to come under increased pressure. Further details of the Group’s plans in addressing its capital dependency on water is provided in the Message of Chairman and Chief Executive as well as the Ranhill Sustainability Report 2022 (“SR2022”). CLIMATE CHANGE RESPONSE RISK OPPORTUNITIES Adverse weather effects such as droughts affects river water quantity and quality. This can necessitate water rationing activities which would impact revenues as well as customer satisfaction levels. Climate change and other environmental related impacts have led to greater awareness and urgency of action in addressing NRW and other issues faced by the water industry. These include expediting water infrastructure related projects such as ORS facilities, repairs, upgrading and construction of pipelines and WTPs and also enabled new opportunities for business expansion across Malaysia. A sudden deluge of torrential rain such as experienced in early FY2023, where Johor experienced a 32-year record high rainfall could lead to flash floods that could affect operations of the WTPs and the water supply network.
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