KUALA LUMPUR, April 16 Malaysian state
investment fund 1Malaysia Development Bhd's (1MDB) net profit
jumped 17 times in the financial year before last, according to
a summary of a much delayed earnings report that comes ahead of
a planned IPO of its power assets.
1MDB, whose board of advisers is chaired by Prime Minister
Najib Razak and which has often been criticised for lack of
transparency, gave no reason for the earnings result in the
summary which was filed to the Companies Commission of Malaysia.
A full report of 1MDB's earnings for that year is expected
to be released next week. Representatives for the fund were not
immediately available to comment.
The past two years have, however, been marked by slew of
power plant acquisitions made in a bid to capitalise on growing
electricity demand in Malaysia, the Middle East and South Asia.
Some 15 plants are expected to be bundled together in the IPO,
which is seeking to raise up to $2 billion, financial sources
1MDB said net profit for the year to end-March 2013 surged
to 778.2 million ringgit, which compares with 44.7 million
ringgit the previous year.
It also said total liabilities grew to 42 billion ringgit
from 8.4 billion ringgit, while assets grew to 44.6 billion
ringgit from 9.5 billion ringgit.
The fund has been dogged by negative publicity over massive
fees paid for bond sales, the near one-year delay in publishing
its financial accounts, and most recently, changing auditors.
It has countered that its bond placement was done to ensure
the timely completion of a real estate joint venture, that its
accounts were delayed due to its change in business direction
and sharp growth, and that the change of auditors was nothing
Prospects for the IPO of its power assets were boosted
after the sovereign wealth fund won a closely contested
government tender to build a $3.6 billion coal-fired power plant
in Malaysia. That should help 1MDB alleviate concerns that the
utilities in its current portfolio are quite old and make the
case that its power business should be considered a growth
1MDB also won a contract on Monday to build a 50-megawatt
solar photovoltaic energy facility in the northern state of
No timetable has yet been set for the IPO but banks have
been invited to pitch for the mandate, sources have said.
(Reporting by Al-Zaquan Amer Hamzah and Yantoultra Ngui;
Editing by Edwina Gibbs)