PBA Holdings Bhd: (P)rofits to (B)ecome (A)bundant?
"When the well is dry, we learn the worth of water" - Benjamin Franklin Is there a high chance of water tariff increases for domestic users in Penang, and what could be the potential earnings boost for PBA? Fresh news on domestic water tariff hikes sparked interest in PBA on Tuesday (26 Dec), with the stock rising 13% to close at RM1.30. Recall that last month, PBA hit limit up (+30sen) to close at RM1.12 on 8 Nov after unveiling stellar 3Q23 results. To recap, higher tariff rates for non-domestic users in Penang were implemented on 1 Jan 2023. This along with lower energy costs contributed to PBA achieving its best-ever quarterly pre-tax profit of RM29.1m in 3Q23. Due to the recognition of deferred tax assets on unutilized reinvestment allowances (RA)*, 3Q23 PAT was higher at RM36.8m. *In PBA’s 3Q notes, it stated that as of 30 Sep 2023, it is anticipated that RM275m out of the RM698m of unutilized reinvestment allowances available will be utilized to set off against futu