KUCHING: Reservoir Link Energy Bhds (RLEB) expects the company’s recent selection by Petroliam Nasional Bhd (Petronas) as the latter’s qualified panel contractors to provide it with stable revenue stream.
This will also enable the company to expand its offerings in well management, continuity services and maintenance, thereby solidifying its role in supporting Malaysia’s energy demand through advanced well solutions.
“Recently, Petronas, through Malaysia Petroleum Management (MPM), announced initiatives aimed at bolstering the robustness of the local oil and gas sector, namely the introduction of the ‘Integrated Well Continuity Services (IWCS)’ contract.
“The implementation of the IWCS adopts a comprehensive contracting strategy, segmenting the work into four primary packages and 13 sub-packages covering critical areas, such as well interventions, well abandonment and work over as well as subsea intervention services.34 qualified panel contractors, including Reservoir Link, were selected to deliver the work.
“This new approach is expected to foster equitable and effective collaboration in engineering projects for wells. This contract is expected to provide stable revenue stream for the company,” RLEB said when releasing its first quarter to September 30, 2024 (1Q2025) financial results.
RELB said as the energy landscape continues to shift, the company is well-positioned to benefit from both traditional and renewable energy opportunities.
“Petronas recently released its 2024-2026 Activity Outlook, signalling an optimistic forecast for oil and gas activities and calling for increased collaboration with OGSE (oil & gas service and equipment) providers. This is expected to create significant opportunities for the group, particularly in exploration, development, production, and decommissioning services, a crucial area as the industry emphasises environmental responsibility and safety,” added the company.
In the renewable energy sector, RLEB said the Malaysia’s Renewable Energy Roadmap (MyRER) and National Energy Transition Roadmap (NETR) outline the country’s strategic shift towards renewable energy, with ambitious targets set by the government, 31 per cent renewable energy by 2025 and 40 per cent by 2035, eventually aiming for 70 per cent by 2050.
“The NETR introduced in July 2023, also supports smart grid integration, energy efficiency and electric vehicle adoption, aiming to reduce Malaysia’s carbon footprint by 2030.
“Reservoir Link’s involvement in the renewable space aligns with these goals, particularly as the company has been selected, alongside Sumitomo Corporation and Maqo Engineering, as a solar power producer under the Corporate Green Power Programme (CGPP). This project will likely open new avenues for Reservoir Link in sustainable energy.
“Further enhancing its renewable energy portfolio, Reservoir Link could benefit from Malaysia’s fifth Large Scale Solar (LSS) competitive bidding process, known as “LSS PETRA”, which offers 2,000MW of capacity, thus the company may expand solar capacity, bolstering its revenue stream,” added the company.
On the recent listing of RLEB’s 51per cent-owned subsidiary Founder Group Limited (FGL) on Nasdaq in US, the company said the strategic listing is expected to enhance FGL’s access to capital and broaden its investor base, supporting its expansion and growth trajectory in the solar renewable energy sector.
“While the group will equity account for the FGL’s financial results moving forward, it is well-positioned to benefit from FGL’s growth, leveraging on the increase corporate visibility and financial flexibility that the Nasdaq listing bring,” said RLEB, whose holdings in FGL had been reduced to about 45 per cent after the listing. FGL is now an associate of RLEB.
In 1Q2025, RLEB group’s bottom line has been impacted by a sharp fall in its revenue to RM42.92 million from RM67.69 million in 1Q2024 due to the weak performance of its renewable energy and engineering, procurement, construction and commissioning (EPCC) segments.
Group net profit dived to RM684,000 from RM1.22 million in 1Q2024,resulting in a decline in earnings per share to 0.22sen from 0.41sen.
In the current quarter under review, the group revenue fell by RM24.8 million (-37%) due to the decreased in the turnover of the renewable energy and EPCC segments by RM29.8 million.
However, the revenue from both oil & gas segment, and water treatment plant segment had risen by RM1.1 million and RM3.6 million respectively.
“In line with decrease in revenue and higher administrative expenses and finance charges, pre-tax profit decreased by RM2.3 million (to RM1.53 million from RM3.79 million) (-60%),” RLEB said in explanatory notes to its financial results.
In the current quarter, the group reported an unrealised forex gain from US dollar loan amounted to RM2.1 million.
As compared to the immediate preceding quarter (4Q2024), RLEB delivered improved earnings in the current quarter as pre-tax profit rose to RM1.53 million from RM202,000 as revenue remained flat at RM42.92 million against RM43 million previously.
“In FY2025, the group remains committed to pursuing new tenders in both the oil & gas and renewable energy sectors.
“The company is poised to leverage its established expertise in OGSE while expanding into clean energy, reinforcing its resilience in an evolving industry. By cautiously implementing business strategies that align with market trends, the group aims to achieve sustained growth and deliver satisfactory financial performance for the year,” said RLEB.
