Infrastructure utilities engineering solutions provider Jati Tinggi Group is diversifying into newer business segments such as renewable energy to dampen financial volatility. The group, which relies heavily on project-based contracts, is looking to mitigate the fluidity of revenue streams.
Datuk Seri Lim Yeong Seong, the Managing Director, acknowledged that its present model does fluctuate and said it must diversify to stabilize earnings. The net profit of Jati Tinggi fell to RM3.92 million for the financial year ending November 30, 2023, compared with RM9.13 million of the previous year, with the margin falling to 3.41% from 3.89%. However, the group rebounded in the first nine months of FY2024 to yield a net profit of RM9.26 million more than double that achieved in the same comparable period last year, at RM3.5 million.
The utilities engineering firm specializes in underground and overhead utilities engineering, substation services, and street lighting. The company secured contracts worth RM270 million in 9MFY2024 while its order book outstanding stood at RM400 million in total. Notably, projects secured included the installation of 132kV underground cables in Cyberjaya and 33kV underground cables in Selangor.
Lim also highlighted the growing contribution of data centre (DC) projects, which now account for 20% of Jati Tinggi’s contract wins. With 79 registered DCs expected to be completed in Malaysia over the next three years, the company anticipates significant opportunities in this sector. Additionally, strong demand from semiconductor companies and Tenaga Nasional Berhad’s planned RM35 billion capital expenditure for grid upgrades from 2025 to 2030 further strengthens the company’s outlook.
Expanding further into the large-scale transmission projects, which include voltages above 132kV, Jati Tinggi is targeting new opportunities in East Malaysia. A part of its growth fuel also comes through mergers and acquisitions.
The group has a solid pipeline of contracts, but in terms of focusing on cash retention to achieve the project fulfillment is set, so it is unlikely that the company will pay out dividends in its first year as a listed entity,” she added
