SD Guthrie expects renewable energy venture to contribute to earnings over next two years - MIDA | Malaysian Investment Development Authority
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SD Guthrie expects renewable energy venture to contribute to earnings over next two years

SD Guthrie expects renewable energy venture to contribute to earnings over next two years

22 Aug 2024

SD Guthrie Bhd (KL:SDG), the world’s largest palm oil producer by acreage, said on Thursday its venture into renewable energy may begin to contribute to its earnings within the next two years.  

The company formerly known as Sime Darby Plantation Bhd is focusing on projects under the Corporate Green Power Programme, which could produce income before the end of 2025, group managing director Datuk Mohamad Helmy Othman Basha said during a virtual earnings briefing.

If the projects materialise and the company secures the assets and necessary agreements by end of this year, “2026 and 2027 are when the impact on the bottom line will be”, he said.

SD Guthrie has leased 11 sites for renewable energy projects with a total capacity of 227 megawatts through the programme. Mohamad Helmy has previously said that every megawatt requires an investment of about RM2.5 billion over the next three to five years, and deliver a return of 8% to 13%.

The company has also participated in the tender process for Large-Scale Solar 5 (LSS5) that closed for bidding on July 25, in addition to leasing its land to owning green energy projects.

SD Guthrie also aims to grow its renewable energy segment through third-party access that would allow an electricity buyer to negotiate pricing directly with a renewable energy power plant for green electricity supply.

“We are excited about this,” Mohamad Helmy said. “We can put up a solar farm wherever we have available land” that is less productive for oil palm trees, he said.

On the proposed development of a port city on Carey Island by the Selangor government, Mohamad Helmy expects the project to have a “huge impact” on SD Guthrie as the company owns about 85% of land on the island.

He did not elaborate further as the project is still pending government approvals.

At Thursday’s noon break, shares in SD Guthrie were five sen or 1.11% higher at RM4.56, giving the group a market capitalisation of RM31.54 billion.

Source: The Edge Malaysia

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