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Reservoir Link Energy Anticipates Renewable Energy Segment To Add Minimum Of 60% This Year To Its Revenues

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growatt01-08-2022

Reservoir Link Energy Bhd anticipates that the renewable energy segment will add a minimum of 60% this year to its revenues as the company is diversifying into green energies after its acquisition of Founder Energy Sdn Bhd.

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Reservoir Link was originally a provider of oil and gas services. It decided to join the transition to renewable energy because it wanted to become an energy player.

Thien Chiet Chai, Executive Director of the company, stated that the company was committed to sustainability and that the acquisition of Founder Energy would allow it to lead in the development and construction of solar farms.

I believe that RE’s contribution this year will be at most 60%. RE business has a large revenue but a smaller margin than O&G. He stated this in a recent interview.

Reservoir Link recorded a net loss in quarter 1 ending March 31, 2022, due to lower revenue at RM6.48million compared to RM11.88million in quarter 1, 2021.

Bong Leong Sung, Chief Financial Officer, stated that earnings were impacted by the October completion of the Mauritania Project. This was due to the monsoon season’s slowdown in oil and gases.

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“We expect strong contributions from RE for Q3 and Q4, barring any unforeseen circumstances. We know the US market is crashing at the moment but these are the things we cannot predict. Our O&G segment is also expected to pick up pace in upcoming quarters to contribute to better overall earnings,” said Bong.

Founder Energy is looking for more renewable energy opportunities. Reservoir Link was approved by its shareholders to purchase a 51% stake in Founder Energy, valued at RM21.2million, in August 2021.

Founder Energy specializes in the implementation of large-scale solar photovoltaic projects, including industrial, commercial and residential. Founder Energy, prior to the acquisition, was Solar Bina Engineering Sdn Bhd.

Thien stated that Reservoir Link participated in the tendering process for the main contractor package along with three other major companies on LSS4.

Discussions are currently in their final stages. Once the projects have been secured, announcements will be made. He mentioned that the company was involved in several ongoing bids in Malaysia, totalling to almost 40 megawatts.

It expects that the projects will be awarded in the third or fourth quarter, while construction work will begin in the first quarter of next year. Reservoir Link has a positive momentum thanks to the reopening of international borders and the resumed economic activities.

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Thien stated that the company was looking for opportunities beyond Malaysia and that Indonesia was its first market after the pandemic.

We are currently looking at Indonesia for another 10-12 MW of hydropower projects. We had plans to expand Indonesia even before the pandemic, and now that the borders are open, we are actively looking for new opportunities.

“We are aggressively making our way there. It is a huge market so we will look at the O&G as well as RE opportunities there,” he said.

Eric Lee, chief executive officer of Founder Energy, spoke out about RE’s overseas activities. He said that the company recently established a subsidiary in Singapore called Founder Energy (Singapore), Pte. Ltd.

“We will begin some work in Singapore mostly on the rooftop and we have tendered some projects as well. The works are targeted to begin in either Q3 or Q4,” he said.

Reservoir Link completed the transfer to Bursa Malaysia’s Main Market after meeting all listing criteria and receiving relevant approvals.

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As it moves to solar and other renewables, the company is well-known as one of Malaysia’s most important solar engineering, construction, and commissioning contractors.

“As part of our efforts to make renewables more viable we have also explored the possibility of delivering energy storage solutions. We are now ready for the next phase of our exciting journey following the elevation of our listing status paired with bright prospects from our business segments which reflect the demand for both the O&G and renewables in Malaysia,” said Thien in a statement.

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