Scomi Group Bhd chief financial officer Mukhnizam Mahmud said, despite rising world oil prices to near US$70 per barrel, the group sees higher earnings contribution from its investment in hydro-electric and solar plants.

KUALA LUMPUR: Scomi Group Bhd will focus on the renewable energy sector mainly in the hydro and solar power distribution as the company sees good potential for growth in the for the sector in the country.

"The rail and oil & gas (O&G) sectors have always been our core businesses.

"But we try to augment our business portfolio with that of renewable energy sector," chief financial officer Mukhnizam Mahmud told reporters after the company's extraordinary general meeting, here, today.

Mukhnizam said the group sees no increased activity for its oilfield services business segment despite the recent recovery in crude oil prices.

He said the group expects to secure RM1 billion of renewable energy projects to replenish its orderbook in the next financial year ending March 31, 2019 (FY19).

"We are in talks with several parties to bid for projects. Last year, we were awarded a 30MW solar project in Kedah with 30 per cent equity ownership," he added.

Mukhnizam said the renewable energy projects would be mainly in both hydro and solar.

At the shareholders’ meeting, Scomi Group investors approved of the company's proposed share consolidation and bonus warrant issue. They also approved Scomi Group's proposed merger with Scomi Energy Services Bhd and Scomi Engineering Bhd.

Scomi Group Malaysia country president Zubaidi Harun concurred the company's focus mirrors that of heavyweight Tenaga Nasional Bhd's objective to have a balance between renewable and conventional energy sources.

"There are opportunities and development to expand the renewable energy-mix portion," he said.

Zubaidi sees future hydro power business contributing more earnings than that of the solar plants because hydro-electric plants generates energy 24 hours round the clock.

"We don't think there will be a lot of changes in terms of performance as the O&G is a challenging industry," he said, adding that Scomi’s future growth will come from renewable energy.

Petroleum prices have been on a rising trend for the past few months, as global demand surpass supply. Concerns over protests in Iran, the third largest producer in Organization of the Petroleum Exporting Countries (OPEC) have boosted crude prices, this week.

Today, international benchmark Brent crude hit fresh highs at US$67.84 per barrel and traders predict it to surpass US$70 per barrel in the near future.

Zubaidi responded oil price movement does not necessarily have immediate benefits on Scomi’s business.

"We are in exploration business. It doesn't seem to pick up immediately. Unfortunately, our business is not directly benefiting from the increase in the world oil price," he said.

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