32 Performance Revi ew 02 Sect ion Ranhi ll Ut i l i t i es Berhad CASHFLOW FY2020 FY2021 FY2022 (RM’Million) (RM’Million) (RM’Million) Cash at banks and on Hand 137.7 197.9 314.7 Short-term deposits with licensed banks 120.5 141.9 74.3 Total deposits, cash and bank balances 258.2 339.8 389.0 Net cash generated from operating activities 121.3 230.8 124.9 Net cash generated / (used) in investing activities (51.9) 2.6 (50.7) Net cash used in financing activities (118.1) (155.9) (32.1) Net increase / (decrease) in cash and cash equivalent (48.7) 77.5 42.1 Starting from February 2022 energy costs has increased by RM25.41 million or 19.48% for treated and distribution water as compared to previous year due to imposition of Imbalance Cost Pass-Through (“ICPT”) surcharges by Tenaga Nasional Berhad (“TNB”) RM0.037kwh. The lack of a decision on a downward revision in present lease rental rates payments proposal to Pengurusan Aset Air Berhad (“PAAB”) had also dampened Group earnings. The Group is seeking a restructuring in the present mechanism that will yield a 11% reduction in lease rental rates. This would provide a RM16 million reduction in OPEX savings and Ranhill remains in active negotiations with PAAB towards revising lease rates for all assets leased from PAAB. Together with potential savings derived from negotiations with PAAB, the Group is expected to achieve improved cost efficiencies that will support profitability for the Environment sector. The Energy sector recorded increased revenues of RM263.9 million, a 19.5% rise (FY2021: RM220.9 million) mainly attributed to higher energy payments received by RPI and RPII to compensate for higher diesel consumption (pass through cost) during Petronas gas curtailment in FY2022. Revenue contributions from Ranhill Solar I Sdn Bhd (“RSI”) derived from revenue recognition from completed construction works for the Large Scale Solar 4 (“LSS4”) was also a contributing factor to higher topline performance. The Engineering Services sector recorded improved revenues of RM288.7 million, a 91.2% rise year-on-year (FY2021: RM151.0 million), on the back of higher topline contribution from RBSB and RW. Earnings, however stood at RM26.7 million, a 38.2% decline yearon-year (FY2021: RM43.2 million) attributed to one off recognition of deferred tax asset by RW post acquisition in FY2021. In FY2022, Ranhill posted revenues of 1,726.3 million, 12.8% higher year-on-year (FY2021: RM1,530.9 million). As in previous financial years, the Environment Sector was the main contributor to Ranhill’s topline performance, accounting for 68.0% of Group revenues. Subsidiary, Ranhill SAJ alone, accounted for 66.9% of Group revenues contributing RM1,154.9 million, (FY2021: RM1,141.4 million). Profit before tax (“PBT”) stood at RM203.4 million, 118.0% higher year-on-year. (FY2021:RM93.3 million). Profit after tax (“PAT”) stood at RM142.2 million, 115.1% higher year-on-year (FY2021: RM66.1 million), while profits attributable to the owners of the parent was RM95.3 million, 211.4% higher year-on-year (FY2021: RM30.6 million). The Environment Sector posted improved PAT of RM217.9 million (FY2021:RM112.9 million), a 93.0% increase year-on-year. Earnings had improved due to the recognition of non-revenue water reduction incentives to be received by Ranhill SAJ amounting to RM142.3 million. However, as the implementation of revised tariffs for non-domestic water categories were only implemented on 1 January 2023, revenues and earnings for the Environment sector were impacted for FY2022. While the federal government had agreed to the implementation of tariff hike commencing 1 August 2022, the effective date of implementation was delayed to FY2023, upon consent of the state government. Commencing January 2023, back dated charges for the months of August-December 2022 based on the new tariff will be imposed on a staggered basis, thus bolstering revenues going forward. The back dated charges together with the new non-domestic tariffs, which are 9% higher, should provide an estimated RM48 million in additional revenues (based on present increasing water consumption trends from commercial and industrial consumers). MANAGEMENT DI SCUSS ION & ANALYS I S
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