Mega First Corporation Berhad (MFCB) Earnings Call Transcript & Summary

A very good afternoon, and welcome back to the Quarter 1 2025 briefing for Mega First Corporation Berhad. My name is John Huo from VUCA Insights. I'm joined by my co-panelist, Rondy Yunanda Yong. Hi, Rondy.

Hello, everyone.

And most importantly, our guest of honor, Mr. Yeow See Yuen from Mega First. As usual, for those of you -- let's do some housekeeping questions first. For those of you who can hear us loud and clear, can you give us 1 in the chat, please, 1 in the Q&A or 1 in the chat, please. Okay. It seems like, yes, everybody can hear us loud and clear. Okay. Great. For those of you who can see the screen as well, if you don't -- if you have a problem, then you let us know. If not, then we will proceed. Usually, the sessions are run in this manner. Mr. Yeow will give us a brief and concise presentation about Mega First's business units. And then we will proceed on to the Q&A post the presentation. For those of you who are here for the first time, normally, the sequence of events will be questions and answers will be grouped together by business units, and we will answer as much as possible from the sequence of that. Then we move on to the next business unit before we conclude with some overall group questions. Without further ado, I'd like to give the floor to Mr. Yeow to present.

Thanks, John. Thanks, Rondy, for organizing this quarter's results briefing. All right. As before, this is the agenda, no change from the previous quarters. So we will first go through the first quarter results review, including the P&L balance sheet, cash flow and some of the other updates, if any, and then followed by the prospects of the group and just an update on sustainability in the third part. All right. Okay. In the first quarter, our revenue was up 9% to MYR 342 million, mainly because of the one-off contribution or maiden contribution from construction revenue in Maldives and also from the newly invested CSC group, our Food Security Group. At the core level, our revenue was down 5%. However, PBT was down 40%, apart from slightly weaker core earnings in packaging, also -- result also made by heavier ForEx losses versus the ForEx gain last year because the U.S. dollar weakened [ incidentally ] during the quarter and [indiscernible] loss in our shared joint venture/associates. And that is reflected in the investment holding and others, where you see the loss from JV and associate rose almost double, in fact more than doubled to MYR 28.5 million and ForEx swung from MYR 1.3 million loss from a gain MYR 3.3 million a year ago. Insofar as the join venture and associate is concerned, the loss is primarily attributable to Edenor's weak performance. The joint venture continue to suffer from massive capacity losses because the plant have yet been stabilized, plus there was scheduled patterns change in February, where we have to stop the plant for that process. To strip out all the noises as before, I will show you what the normalized profit before tax is. And the table shows you the reconciliation of that number, so that...

Mr. Yeow, your microphone might have been disconnected.

All right. Sorry about that. Okay. So as before, we will show you normalized profit before tax, what we consider as the core earnings of the group. Based on the normalized PBT, we were down 11.5%, mainly reflecting weaker performances in Resources and Packaging and also additional ForEx loss versus the ForEx gain in the previous year. We also show you the normalized profit after tax and non-controlling interest. Debt was down 8.4%, again, because of weaker earnings in Resources, Packaging and higher ForEx losses. Okay. Moving to each division. On the RE side, revenue was down 4.3%, mainly because of 5.8% translation loss, partially offset by 1.6% gain in U.S. dollar revenue. Solar energy was stable, MYR 2.7 million. The hydro energy sales revenue of 1.6% gain was driven by a 7.3% increase in energy volume, driven by a fifth turbine addition, which is -- I mean significantly offset by a 5.4% reduction in average tariff after we have executed the new supplemental concession agreement and supplemental purchase -- power purchase agreement, which took effect on first January 2025. But PBT was steady at MYR 88.8 million, because lower revenue and higher operating expenses were offset by lower net interest expense and substantially lower net royalty expenses after we invested in the water rights in December last year. Okay. This is the water level of Pakse and the corresponding capacity factor. You can see the orange line, water level up to April has been good relatively compared to the last 2 years, the previous 2 years. But you can see the capacity factor is lower. That's because of the addition of the fifth turbine, all right? So we have additional capacity. But even with 4 turbine, we never had enough water to even run 4. So now with the additional capacity, the EAF appears to be lower. Okay. Going to Resources division. Revenue is down 12.2%, mainly because of slower sales volume of lime products, especially in the export market, reflecting the intense market competition in the region and also subdued demand because of slower economic activities. Sales of non-lime product is down 12.7% and PBT is down 33% to MYR 9.7 million because of slower sales and more intense competition. Packaging division, very soft consumer demand during the first quarter, massive industry overcapacity, intense price competition, resulting in a marginal decline in revenue of 1.5%. But because of the margin pressure, PBT actually fell almost half to MYR 4.4 million. Okay. Balance sheet items, explanation on the change in balance sheet items. The one that is worth noting is we continue to have some CapEx not much compared to previous years. There's a sharp decline in the receivable and other assets because of improved collection and also lower prepayment of solar development costs. Other than that, I think it's self-explanatory. Okay. Cash flow. This quarter, we have a very strong operating cash flow. After tax, cash from operating activities was MYR 215 million, plus some of the receipts from investment activities and new capital. Total cash made available to the group was MYR 231 million. And there's a substantial reduction in investing activities as expected because of the gloomy economic outlook, we are tightening our belts as well. And after factoring in financing activities, net cash -- net debt of the group actually improved by MYR 139 million. This is a breakdown of the capital deployed during the first quarter of MYR 82.6 million. The pie chart on the right, as you can see, Renewable takes up MYR 30 million. Others actually is MYR 42.6 million. That is mainly from the investment -- additional investment in the associate and joint venture. Gearing position, because of the strong cash flow in the first quarter, net debt has been reduced to almost MYR 740 million with a net debt-to-equity ratio dropping from 25% to 21% at the end of March. This is the earnings of the joint venture, Edenor. As you can see, during the fourth -- during the first quarter this year, it suffered a loss of MYR 56 million and our share, therefore, is MYR 28.2 million. Okay. More importantly is the prospects for remaining quarters of 2025. As we all know, the global economy is facing very significant uncertainty. There's massive disruption in supply chain worsened by unpredictable U.S. policies. So businesses around the world, including us, we respond cautiously by reducing our investments and controlling costs, which inevitably will dampen the global economic activity. Despite these challenges, our RE side is expected to remain stable because of the long-term agreements. However, the Resources and Packaging side, the future is less certain as our Packaging division continues to grapple from falling demand and heightened competition because of excess capacity. There's also some evidence of export diversion linked to the Trump era tariff. As of end of March, we still have an outstanding capital commitment of MYR 189 million. The bulk of it is actually for renewable as we complete our green corporate program of 50 megawatt and also the Maldive project. So these 2 projects accounted for about MYR 80 million. Packaging is the tail end of our expansion that took first 2.5 to 3 years. There's nothing new there. All right. For RE side, I think for the remaining quarters of the year, what we observed in the first quarter will also apply to the next 3 quarters. They are offsetting factors. The positive factors is we will have higher energy sales volume, lower net royalty expenses and lower amortization charges because of the concession period extension. However, on the negative side, there is -- because of the reset of the entire concession period, the energy tariff has been reset to USD 0.06 this year compared to last year's weighted average of USD 0.062236. We are also experiencing higher O&M expenses and overall cost because of the addition of the fifth turbine. All right. For solar side, we still have about 62.4 megawatt that's under construction that will be completed by the end of the year. So we should expect a progressive improvement in solar earnings. We are actively pursuing new opportunities under the National Energy Transition Roadmap of Malaysia, that includes the 2 recently announced programs, Battery Energy Storage Scheme or BESS and Corporate Renewable Energy Scheme or CRESS. We have been recently shortlisted for -- by PETRA as a prequalified developer for Battery Energy Storage System, and we will be participating in the upcoming tender that will close in July. Okay. This is a picture of our Solar Tronoh, the progress. This is our Maldives. This is also Maldives, 11-megawatt. And this is a summary of our renewable capacity. By the end of this year, we will have a total generation capacity of 420 megawatts. Okay. On Resources side, as mentioned earlier, both domestic and regional demand is expected to be subdued amid a projected slowdown in regional and global economic activities. And because of this weaker demand, we are actually seeing competition intensifying, including players from China competing with us in mines in Papua New Guinea and Indonesia as well. So we will continue to focus on improving our cost efficiency and expand -- try to expand our customer base, especially in Australia. And we will stay -- continuously stay responsive to supply chain and market challenges. Overall, for 2025, we do see earnings coming down, but we think it's going to be satisfactory. Packaging division is expected to face tremendous challenges this year because of rising competition, overcapacity and very cautious consumer spending. So we will continue to grow our customer base. We have made headways in some of the big customers and if this materialize, that should help cushion the impact. Our recent capacity expansion, especially Stenta's LLDPE and also Hexachase's new printing and extrusion lines. This may put pressure on margins in the short term, but it will strengthen our division market position and support earnings growth after this 2025. Okay. On Edenor, first quarter is pretty substantial loss. We expect second quarter also to be in a loss position, mainly because of the explosion and fire in Putra Heights gas pipeline. And that has disrupted gas pressure and supply to the [ Klang ] region, including Edenor since 1st of April. Some gas supply has already been partially restored, but we are still subject to significant curtailment and therefore, we are not able to operate at optimal level. Based on Petronas gas statement, they estimate the gas supply can be restored by the 1st of July. So in the meantime, we are applying continuously to gas Malaysia to increase our quota so that we can push our utilization rates above optimal level. Management also believe that all the necessary repairs, upgrades and tuning work have already been completed since March. And therefore, barring any unforeseen plant issues and once the gas supply normalizes, we expect Edenor to return to profitability in the second half of this year. Okay. Just some updates on sustainability strategy. I think this one you can refer to these slides, which have already been uploaded into our website. I think I'll reserve more time for Q&A. All right. Thank you.

Thank you so much, Mr. Yeow.

As usual, we'll be here because of the various divisions, we will book the questions based on business units and intermittently, we will try to answer any group level questions in between one business unit [indiscernible].

Thank you so much, Mr. Yeow. So as usual, all the questions will be grouped based on business units and any group level questions, we will try to answer in between those intermittent business unit questions. Either that or we will group all of it at the end of the presentation. So as usual, the biggest unit, which is the Renewable Energy. Rondy, you may want to start or you want to give me a start?

Yes. Okay. I'll start from a question from Mr. Hanwei, ESG Capital. I think my voice is okay, is it?

Yes.

Okay. So Mr. Yeow, he is asking what is the actual cost of major overhaul for the first turbine? Does it exceed the previous guide of USD 5 million per turbine budget for major overhaul? Secondly is, did the maintenance cost of minor overhaul increase for each turbine? Recall the previous guide was about USD 2 million per turbine.

No. I think -- I don't know where you get the guidance from. When I first guided on overhaul cost, I gave a figure of USD 3 million per turbine.

Minor, right? Major?

No, major. Major is USD 3 million. What we actually spent is between USD 2 million to USD 2.5 million. So it came down, it came below what we guided. On the minor maintenance, it's not expensive. It's probably a few hundred thousand. And depending on what we discover, it can go a bit higher or it can be slightly lower. If it is the spare parts that we still have on hand, it becomes lower.

Understood. With regards to renewable and moving a little bit away from maintenance, it seems like the EAF is no longer reported, which is what [ Yoo Seong ] is asking. Is there a reason?

I don't want to confuse the EAF during this transition year. Because one is based on 5 turbine capacity and last year's is based on 4 turbine capacity. Naturally, it will drop, all right? What I'm trying to give this quarter is to tell you exactly what the energy generation was, which is, if I'm not mistaken, it's 483.5 gigawatt hour. If you want to calculate the EAF, you can just take 325 megawatt capacity, multiplied by 24 hours, multiplied by the number of days and then use the actual generation that I gave you to divide by that denominator, you will get a percentage, all right? And if you work on the 5 turbine capacity, the EAF would be 69% around there. Just bear in mind that in the first quarter, one of the turbine is under overhaul. If you were to strip that overhaul turbine out means just based on 4 turbine capacity, the EAF would have been 86%, which is higher than last year. I think last year, it's somewhere around 83% or 84%.

So if I were to summarize overall with the -- even with the maintenance with the fifth turbine, the major overhaul, the minor overhaul, EAF is still higher than that of 4.

Yes. But I mean, of course, now you have 5 turbines, you have the spare turbine so to speak. That's one of the reasons why we invested in the fifth turbine so that at any point in time, I have 4 turbines available to run. And during the dry season, you can't even generate 4 turbines in full, but you can generate 3-plus turbines. So before we have the fifth turbine during the maintenance period, I can only run maximum of 3 turbines. Once I have 4 turbine available, I can run at 3.7 turbine equivalent or 3.5 turbine equivalents, and that has resulted in the 7.4% increase in energy generation, supported by higher water level in Pakse during the last 1 month -- 1 to 2 months.

Okay. Another question from Mr. [ Hing ]. In the first quarter results, there's a statement stated that the pretax profit fell due to a negative swing of MYR 15 million in net interest expense or income and net movement in expected credit loss charges. Wondering what caused the negative movement in the expected credit loss? EDL should be prompt in payment under the new CA and PPE.

You are -- if I'm not mistaken, you are referring to Q-on-Q comparing the first quarter with the fourth quarter last year. Now fourth quarter last year is an adjustment quarter where we take into account all the new agreements that we have made with EDL, including restructuring of the long outstanding trade receivable to become an 8-year term loan reflected in long-term asset, you can see in the balance sheet. When we did that, all the previous provision for estimated credit loss is no longer necessary. So we wrote it back and become a credit or income. So in first quarter, we had a loss. Fourth quarter, because of this ECL write-back, I have a profit. So if you look at on a net finance -- okay, net finance means everything in, including interest expense, interest income, late payment interest from ECL, EDL, all your estimated credit loss movements. You combine all these, there's a net swing from a gain of MYR 13 million to a loss of MYR 1 million. So the swing is MYR 15 million negative swing because I got credit in 4Q and still a minor loss of MYR 1.5 million in the first quarter. But if you think about it, can you imagine you only have MYR 1.5 million loss in net interest expense in the first quarter. So we are moving -- we are near positive territory.

Yes. Okay. Not much questions on renewable this time actually, more towards the BESS, but we'll come to that. I'm scrolling through any more on Don Sahong, I don't see any...

I think basically, there is a question about U.S. dollar and the FX impact on basically Mega First. How many percent of the business is packed to U.S. dollar? Any measures taken to manage the dollar weakening risk?

All right. The U.S. dollar impact can be broadly divided into 2. The first and the biggest impact is our operations that are denominated in U.S. dollar, namely Don Sahong. So we have to -- each time we consolidate and report our numbers in ringgit, we would have to translate our U.S. dollar functional currency of Don Sahong into ringgit. Therefore, if ringgit strengthened against the U.S., whatever U.S. dollar revenue will begin lower in ringgit terms. And in my earnings review, I always relate that to as translation loss, okay? So it's direct, okay? There's a 5% appreciation of the ringgit. There's a 5% drop in ringgit earnings from Don Sahong assuming U.S. dollar equivalent. The second part is operational, where I do either purchases in U.S. dollar or sales in U.S. dollar in Malaysia context. And for resources side, about 60% of my sales are exported, and these are primarily in U.S. dollar terms. So as you can imagine, when ringgit strengthened, I will get less ringgit receipt. But my pet coke is in U.S. dollar. So there is some natural hedge, but not 100%. The net effect is if the ringgit strengthened against the U.S. dollar, I tend to suffer some ForEx loss and the reverse is true. In the case of packaging, about 50% is exported, half-half, okay? But my purchases of [ resin ] is also in U.S. dollars. So there is also some natural hedge. But like the Resources division, I will have some ForEx loss if ringgit strengthened and the reverse is also true. So this is the impact of the U.S. dollar. So long and short of it is, if ringgit continues to strengthen against the U.S. dollar, it's a negative for us. There's not much we can do about it, especially for Don Sahong because you can't have a long-term hedge. The only way we can mitigate it is to borrow more in U.S. dollar even for investments in ringgit so that we use the future U.S. dollar proceeds to settle the debt of U.S. dollar taken out for other purposes. That is one of the more effective way. But since we are not spending a lot of money, we are not borrowing in U.S. dollar. So we just have to live with that.

Refresh my memory again, Mr. Yeow. There was a key component for the payment. And because of this new restructuring, is that key component reduced or enlarged? And will that actually help as a hedge?

No, the key component is gone, all right? So since the 1st of January 2025, 100% of our billing will be paid in U.S. dollar, together with the restructured term loan, restructured long-term receivable will also be paid fully in U.S. dollar secured against payment from EDC to EDL. So we don't have to worry about collection because what EDL sells to EDC, the margin is big enough to service everything and to pay us off everything. So since January, February, March, April, we have been collecting steadily.

Is that the result on why and how your AR had actually dropped tremendously this quarter?

Yes. So AR now has gone back to the right full turnover month, which is around 2 months.

Right. Is there any more outstanding from that particular kit conversion to dollar in terms of the accounts receivable?

It's now sitting as long-term receivable, repayable over 8 years at the interest of 6% and servicing debt is secured against payment by EDC to EDL. So we no longer need to ask. It's automatically paid to us. So it was quite an achievement by our team to negotiate this settlement with them.

I think we can ask the BESS question.

Within renewable, yes, exactly. So maybe you go ahead.

Okay. I think there's -- there are a couple of questions on BESS. Firstly is, noticed that MFCB is shortlisted in the BESS bid and tender. Wondering what is the group's internal forecast budget per megawatt for BESS? And just to follow up on that is basically, can you outline Mega First's approach in BESS tender? And maybe you can also highlight to us what are the economics or the potential economics to Mega First on these projects?

Okay. Just to clarify, we have only been shortlisted as a qualifying developer. We are only qualified to bid and the bidding has just opened and the bidding will close in July, we will bid. And our bid will be together with a technology partner, which I don't want to disclose names here. It is a very big company from China. They are the ones who have experience in building large-scale battery energy storage, which no Malaysian companies have that experience. So it's important to have a technology partner for this endeavor. We do not know all the terms yet. It's still very sensitive because nobody has done it. I don't think anyone is willing to share their expected cost per megawatt is highly sensitive, but we will have got to work closely with our technology partner, come up with an appropriate strategy and hoping to win this bid this time around. There are 4 packages are available. And I think there are 40 pre-qualified players names, but some of them are duplicated. So I think effectively, maybe only about 20. So let's see.

If you don't mind me asking, Mr. Yeow, would you happen to know what are the criteria to allow for the qualifying bidder?

It's written in the document. Basically, you need to have a track record in owning power plants, okay? So -- and because of that, PETRA could not qualify, for example, because they don't own power plant [indiscernible], I think, 50 megawatts.

Yes. understand. So they wanted the operating experience rather than just...

The irony is that this technology is new to Malaysia. So none of us have any experience.

But you have coal fired or hydro fired...

Yes. We have solar, we have hydro. So none of us have any experience in battery energy storage, but China has and a few other places have.

Understood.

Yes. So we are working with our technology partner to provide us with the design and also provide us with what they consider as the right technology. And then from there, we have to work out the cost and ultimately bid to ensure we have a certain rate of return on the project IRR.

Would it be safe to say that it would be at least a double-digit IRR before?

No way. There's a problem with this very competitive e-market. I don't think it's going to be any different from LSS where people are willing to accept a slightly lower IRR.

Understand. Not too different from LSS.

Yes, in terms of competitiveness.

Yes, because it's -- I'm trying to answer based on the approach, just a repeated the question. All right. A lot of questions on Edenor actually. Anything else on BESS or...

Yes. Maybe I'll just ask 1 or 2 other questions with regards to solar. Tariffs placed on solar panels, how will this impact solar players maybe such as yourself?

Well, I mean, it's good for us. Solar panel prices continue to be depressed. It affected solar panel manufacturers in Malaysia because although it's manufactured in Malaysia, I think the U.S. still impose crazy tariff. So those companies like LONGi who heavily invested in Malaysia, I mean they will suffer tremendously. But for us, I think there's no impact except that the prices will continue to be cheap for us. So it's good.

That's good. Yes. There's a question here with -- from [ Vera ], who says, is there a potential where to unlock value of the Renewable Energy division? Is there a thought process of spinning it off and listing it separately?

No. Whatever makes a lot of money, no point spinning up.

No point spinning up. Okay. There's a question from Gabriel going back to turbines. Upon the completion of the fifth turbine, cash flow from Don Sahong will be building up. Can you share your thought process on future capital allocations? Would the cash be for new businesses, paring down borrowings or more allocated for shareholder returns?

Okay. Based on -- of course, our cash flow is still very strong. We will generate just from Don Sahong alone, we will generate a pure cash every year of USD 130 million.

Roughly about USD 600 million almost.

Yes. So -- and we will cautiously use this cash. In terms of our investment outlook, we have turned very cautious. We are tightening our belts. We are conserving cash. We are preserving cash flow. And we will probably only look at investments that can generate future cash flow, and we will probably hold back on further investments in manufacturing-related investments with the exception of maybe Edenor, which I will address later on, because we still see it as a positive investment, and we are about to cross that hurdle to turn it around. So during this difficult period, we will support it. And once we have cash, of course, it depends on whether we have a big project coming through. I think during the AGM, the Chairman hinted something.

I need to ask that question actually.

I cannot give you any more than what he has said. But as I always address this issue in the quarterly briefing, we are always on the lookout, all right? It's just that our investment priority has shifted, given the uncertainty facing the global trade scenario. So -- but we will continue to invest things that can have more stable cash flow generation, which includes RE, right? so we will continue to pursue that.

/> Maybe just on OpEx for those people because I'm supposed to ask this question, there are a couple of them who attended yesterday's AGM, wanted me to ask this question as well. But just for those who did not attend the AGM yesterday, Chairman basically mentioned that Mega First is to invest another MYR 1 billion in cash flow generating business.

Budget. Maybe clarified budget.

Yes, not in manufacturing, but to buy utilities and water rights and expand the Renewable Energy business, buying something big, which he deem is available out there, yes.

Well, I mean, I'm going to repeat more or less what he said. Essentially, what we are prepared to do is we have -- we want to set aside MYR 1 billion to invest in RE, which can come in the form of generation capacity or water rights or any related businesses in RE, okay? And there are always opportunities. And we think that we can secure 1 or 2 of them. And therefore, we put aside this budget, so to speak, all right? But do we have anything to announce? Answer is no. Of course, Chairman -- being Chairman, he hopes he can finalize it or come to some form of conclusion by the end of this year or first quarter next year. This is expectation, all right? But me being more cautious kind of guy, I say, please just hold your horses, all right, until such time that it materializes. But what is important is just understand the cash flow is intact. Yes, there are some headwinds in the manufacturing side. Yes, we are probably going to make less profit compared to last year in our resources and packaging. But I don't think we're going to go into a loss position. The one that is critical now that we are actively managing is Edenor, all right? Because that investment can be quite strenuous, not that we cannot afford it. We can definitely afford it, but we don't like to lose money. So we definitely put all our attention into turning that division around. So a question was asked on the site after the AGM by one of the shareholders that, he said, we have always been quite accurate in how we guide the prospects of Mega First. He said, but Edenor seems to be a little bit off, all right? Because I remember what I said last year, I said we should be able to turn around in second half.

Last year?

Yes, but we didn't. And in the last quarter results announcement, I said we should have completed in all the changes in December, but we still fail to stabilize the plant. Now I just want to put things into perspective, all right? First we are dealing with a very old plant. It's is like you just buy over a very old car. Unfortunately, when you buy over an old plant or an old car, a car, you can just straight away send into overhaul, all right? And you don't use it for like 6 months. And then when it's overhaul, you get kind of a little bit brand new car. But in oleochemical complex business, you can't because if you look at the facility, you understand what I mean. It's very sprawling. You have how many tens of kilometers of tube and pipes and you cannot stop the plant for a long period without destroying your customer base, and you will be suffering too much losses in the process because you got to carry your employees, you kind of let go. After you let go, then what's going to happen when you restart, you don't have employees. And it's a very high fixed overhead business. So what we have decided to do is, okay, we deal with what we can see. And after we dealt with what we thought we need to deal with, there are always surprises, somewhere in the pipe starts to leak, and then you can hear the hissing sound, steaming coming out, then you have to stop the whole plant. And then you're going to repair that one. And then you're going to restart, repair, restart, repair. So the joke among the top management, I mean, it's a cynical joke. It's like, well, at least we have now covered a very extensive ground. There are fewer stones left unturned. So the chances of surprise will get lesser and lesser each time. So now we are confident, quite confident, of course, again, fingers crossed that we should have taken into -- we should have dealt with what we need to deal with. Then before we start pushing the gas pipe explosion and that really hit us, all right? So we had to stop completely. Of course, over the following 2 weeks, 3 weeks, gas starts to be restored, but the amount of gas that was supplied to us is not enough for us to fire up certain manufacturing processes. So the plant remains highly underutilized. And we have been negotiating and discussing with Petronas Gas to try to restore it earlier than 1st first of July. They have been very helpful and supportive. They understand our predicament. So we think that we can at least run maybe around 70%, 80% until the pipe is restored. So as we speak, the plant is being prepared for running. And hopefully, in the course of the next few weeks, we will have more positive news coming out from that plant.

Yes. I remember you had one slide on the gas impact, right? Did I miss it?

Is it prospect side? Yes, go down, go down.

Yes, this is -- because there was a question on it, I wanted to type in the reply. So restoration fully by July 1.

That is an estimate, okay? Because as far as I know, the investigation has not yet been wrapped up, let alone repairs. So the investigation is a police case. They are still figuring it out what happened, who is at fault. And only after they have done that, then only will they start repairing the pipeline. So now we are in late May, we still have about a month, slightly more than a month. Hopefully, they can be on time.

Yes. But this was what Petronas has given?

This is the statement -- yes, it's a written statement by Petronas Gas.

Okay. Just last 2 questions. Then I think we can move to Edenor and move proper because there's a lot. Okay. I think I can combine 2. Malaysia has recently opened bidding for new gas power plants, would Mega First be bidding? And in relation to that, how many renewable energy deals do you evaluate in a year? And what are some of the reasons how you rejected them?

Gas plants, we are not likely to go for the gas fired power plant. We have also changed the way we develop our solar. We are moving away from C&I because I think the quality of the prospective customers are declining because those good ones already installed. And those who are not installed, some of them are just not so good.

So [indiscernible] Malaysia.

All right. Solar is really, for us, is in Malaysia and maybe Maldives in countries that we have confident of securing and also confident of executing the project. Our focus will continue to be these 2 programs that the Malaysian government have announced, which is BESS and CRESS. So we are also working on CRESS, and that is in the works. All right.

Okay. Okay. Rondy, any more before I move to Edenor?

I think we should move to Edenor. There's a lot of them.

Yes, a lot of Edenor questions. Okay. So maybe going all the way back up to Hanwei Yong from ESG Capital. For Edenor, how often does the nickel catalyst needs to be replaced?

Once or twice a year.

Okay. Secondly, does Edenor -- okay. Is Edenor still able to commit to orders on time since there are so many unexpected disruptions, extensions and gas pipeline leak incidences?

No. We are not able to deliver some of the contracts. And this is because the plant failed to produce. So there are some cancellations. There are some cases where customers allow us to defer. Usually, there is no penalty. So -- but we are not able to deliver what we accepted. I mean we cannot deliver all the POs that we have accepted. So in the last few months, we were still delivering last year's PO.

Okay. The losses of Edenor in first quarter '25, how was the core loss figure looks like if excluded all noncash items like impairment and unrealized hedging losses?

Well, we are burning around MRY 10 million to MYR 15 million cash a month.

Okay, MRY 10 million to MYR 15 million a month. Okay. And fourth question, how heavy -- okay, I'm trying to get all the English right? How heavy does the pipeline leak impact on the operations? Should we expect Edenor's loss to sustain somewhere around this quarter and subsequently improve in third quarter '25 onwards? Please give us some color on that cost of -- okay, from losses gradually eating up into the EPS. I think he wants a quantifiable number or guidance on the number for third quarter -- second quarter to third quarter kind of guidance on earnings.

Okay. We -- I think the worst is over, all right, because the worst is when we are not even running the alcohol plant. So the worst is over. If you talk strictly in terms of operating loss arising from this gross underutilization of facility, we have already seen the worst, okay? But there's always another element, which depending on how the commodity price fluctuates will have either a positive impact or a negative impact on the earnings performance, and I just give you one example. If we take in a PO in a particular period, and we are supposed to deliver, let's say, 2 months down the road, there's always price expectation already and cost expectations. So you're supposed to lock in your cost and your price so that you lock in your margins. Now if I fail to deliver, it's not the fault of the customer, I cannot produce. And when I'm ready to deliver, the prices shot up. So I have to honor the trade at the higher input cost to me. But the reverse can be true, right? So in the fourth quarter last year, up to first quarter this year, the price were not in our favor. It was a rising trend and then stabilized at a very high price. So we were playing to catch up with delivery. All our hedging also go haywire because we are supposed to deliver, we hedge until this period, but we cannot deliver. Then you could have buy a raw material, but you no longer have a hedge. So if you sold at a cheaper price last year, then you have to take the loss. You don't have a choice, all right? Otherwise, you lose credibility, you lose honor. So we still have to do all this kind of -- we still take this kind of risk, not that we want to. The fortunate thing is in the last 2, 3 months, the price seems to have more since they've fallen a bit. I think if you look at CPO futures prices, it came down. So that eased our pressure. So that's why I say earnings-wise, I think we are -- we have passed the peak because last fourth quarter and first quarter is like double whammy. Everything hit us all in a negative way, production capacity down, input cost goes up, margin gets squeezed because we preaccepted the order at much lower price from the customer. So we have to suffer the margin squeeze. All these are over, okay? And now once the gas can come back and we can produce at 80% or more, we are quite comfortable that at least we will be cash flow positive. P&L positive, we don't know, but at least we will be cash flow positive. So over the next 1, 2 weeks, we are monitoring it very carefully because the plant takes time to prepare itself to take new feeds. You know that. You work in petrochemical complex, you know it takes time to prepare the catalyst. It takes time to build up the pressure in the chamber and the reactor, it takes time to heat up. You cannot just straight away goes to...

It's not like booting up a Windows PC, by the way.

Yes, because we are talking about 210, 215 atmospheric pressure. So it's very pressurizing chamber. Anyone who works in petrochemical complex or olechemical complex will know or those who operate furnace, you will understand what I mean. So it takes time. And now that we are ready, so we are doing it now. And we will only know whether we are successful and things run smoothly in 1 or 2 weeks' time.

Mr. Yeow, I just want to jump back because there's a question about commodity price. Of course, why you mentioned about the CPO futures and how that impacts everything. But how -- I mean, Mr. [indiscernible] here is asking how volatile is volatile enough for the CPO price volatility to impact your profit? Is it like a 5% swing, a 10% swing and all that?

Any swing is bad, okay? You just imagine you don't have -- first, you don't have a lot of margin to play with, all right? The delta is quite narrow because raw material is probably around 80% of your cost. So if your raw material increased by $100 per ton, it's very substantial. It can be very substantial. So you've got to manage that carefully. And to make it worse is there's no perfect hedge, not just because of timing of delivery, timing of input, you've got to anticipate, right, okay, you take an order, the customer says, I want you to deliver in February, they may not honor. They will call you and say, February, I'm full. Can you push to next month? Then you've got one month exposure there, all right? And the reverse is also true. We cannot deliver. So there's no perfect hedge. That's why there's this argument that why do we just don't hedge. But I think we still need to hedge. There are people who just think forget it, why do you want to hedge when you can't determine the timing of delivery, the timing of production and also you can't hedge the exact commodity that you are buying because the only instrument available for hedging is CPO. I can't hedge CPKO. I can't hedge pump styrene, which are my raw materials. And these prices can diverge or close the gap. It can go either way. So in October, it actually diverged, okay? Now it's still very wide gap. So it's quite a dynamic operating parameters, not easy to manage.

I am just going to answer 3 -- I mean, ask 3 questions together. So coupled with the increasing JV loss, which I think right now, accumulated losses is apparently close to about MYR 90 over million for the past 5 quarters. You have further invest MYR 40 million in the associate this quarter. So how much more CapEx is required for this venture? And I think I want to pair this up with basically, is there any sort of exit plan or exit criteria for Edenor where the losses is just too much to bear really?

Sure. I mean we are not guided by emotions. I just want to assure you all that. We are guided by sensibility, commercial sensibility. Is this a bad investment? Answer is no. I think this industry is still a viable industry, commercially viable with reasonable returns. And more so for us because we got in really, really at a low price. Even with all these losses, my share of -- my associate book value is still higher because remember, we are forced to recognize a bargain gain difference, all right, of MYR 300 million, which our share is about MYR 150 million. So MYR 150 million plus MYR 20 million. So we had a book value of MYR 170 million. And right now, it's still maybe slightly below MYR 100 million. So we are still in a very positive territory, okay? And why I say we will only invest and continue to support it if we see that we can -- we are able to turn it around. The moment that we know we cannot turn it around, we will find an alternative plan for that, okay? What this alternative plan? It can be anything, all right, it can be anything. But we are not prepared to be emotionally attached and burn cash for the sake of burning. So we do foresee that things are turning. But again, people say, yes, that's what you said last quarter. So we truly believe, as I said, the more area you cover, the less stone is left unturned. So we should be there really, should be reaching there. If not now, at least soon.

Can I just reconfirm the numbers? So in a way, associate book value is roughly about MYR 170 million...

When we first started this -- okay, even before all the profit and loss, our book value after recognizing bargain gain difference, it should be around MYR 170 million for Edenor.

Okay. Yes. I just want to type it bargain gain difference is MYR 170 million. Okay. Rondy, anymore?

Yes...

Just -- I think there's one part of the question that I haven't answered. So in terms of CapEx, we have spent around MYR 70 million, MYR 80 million in the last 2 years to kind of modify and upgrade the plant. Initially, we just thought of doing more repairs. But after one year or so, we decided to actually make a more drastic improvement to the entire process flow of the plant because we realized that the plant was not built as a very efficient integrated plant. it was built and then added parts bits and pieces. So you know what it means when that happens. So [indiscernible]. Flow is not efficient. There are plenty of bottlenecks that actually curtail the ability to produce up to capacity for certain processes. So we streamline all this, okay? And as you streamline, you also find problems. And that's why it took us longer than expected. So all these are over, all right? All these have already been spent and paid for, and we are now ready to actually harvest it, provided no new issues come up as always keeping fingers crossed. So that's why in my prospect note, I said assuming I can run the plant -- performance of the plant is smooth and the gas comes back, I should be able to run profitably after making so much modification to the plant.

So there is someone who's asking, so what's the current and future targeted utilization? And can you remind us again, amidst all this negative news on Edenor, but once it is at the optimized level, what is the ballpark revenue and profit cash flow you can deliver?

I think even the first slide, we already talked about potential revenue of MYR 1.5 billion, okay, a year. And if you look at the results last year, we only did, say, MYR 100 million because our utilization was only about 50-odd percent, to be exact 57%. So in the first quarter, it's even worse than 57% because our alcohol plant literally didn't run much, all right? And that's an 80,000 tonne capacity. So once we do that, once we -- once the gas comes back and if we can run at above 80%, then we should be fine. Of course, if you ask management in any production mine like this, you try to run 90% to 95%, then you are then assured of the efficiency and the productivity of the plant. It's like a furnace. You want to run in full as much as possible. So the 5%, 10% is to give for maintenance and a schedule breakdown -- a scheduled stoppage.

Scheduled turnarounds. Okay.

And I think We answered most of it.

Yes, because most of it is repeated also. Okay. I'll probably use this good break as to ask a group question. So EPF has been consistently buying shares over the past few months. Is there something that they know that we don't? And are they seeking a board seat?

No. I think I talked to you guys more than I talk to...

Okay. All right. Shall we move on to hospital or you want to do food security, first?

I think the core business, first, maybe resources.

Resource, okay, that's good. You go ahead.

So on resources, last briefing, Mr. Yeow, you were saying there is a few large shipments that was delayed and billing sales is pushed into quarter 1. In that consideration is quarter 1 sales really that bad after we deducted that delayed shipment, which was supposed to happen?

No. If you look at Q-on-Q, first quarter is much better than 4Q, all right? And if you look at year-on-year, first quarter also -- okay, first quarter is slightly less. So there is some softening of the market. If you look at the steel companies in Malaysia, production has gone down. Construction activities have gone down. If you look at the mining activities also in the region, they have softened. Again, everything will be slowed down when everyone tightens their belt.

What's the real industry demand for limestone, especially under the tariff tension nowadays? Please give us more color on that. Can profit margin be sustained at current levels of 15% to 20% for the upcoming quarters?

I think margin is -- margin should be stable. Margin should be stable. Of course, last year is an exceptional year, all right? Last year was an exceptional year because I did explain this before is we were actually playing catchup on price increases versus our cost increases over a period of 3, 4 years when pet coke moved up steadily from USD 65 per tonne all the way until $260, $270 per tonne. So my pet coke was 17% of my cost of sales to become more than 70% of my cost. That's how bad the situation was. Of course, at that time, our selling price on average was around less than MYR 300. Now it has gone up average selling price of MYR 400 to about MYR 410. So as we were raising our selling prices, we caught up gradually. And then pet coke started coming off towards the end of -- in the second half of 2023. And so you have the cost coming down, but our price continues to go up because we are playing catch up. So eventually, we actually make that what we wanted to make on a per tonne basis, all right? So we used to make around MYR 80 to MYR 100 per tonne. So we are now back to that level, okay? So I always use the comparison. When we were doing 200,000 tonne sales, we were actually making around MYR 16 million, MYR 17 million profit. Today, I'm doing 0.5 billion tonne -- 0.5 million tonne. So technically, I should be making around MYR 40 over million, and that's where we are, okay ? So is this sustainable? Answer is it should, but depending on the various factors, how they evolve. So if the competition starts to kick in, which they have because of all this trade tension slowdown in China. So when things slow down in China, Chinese manufacturers were just exported overseas. And they are able to lower the price because they look at incremental costs, all right, the incremental revenue. So they compete with us. So we have 2 choices. One is I match you or the other one, I give out the volume. So sometimes you can't even compete. They are just ridiculously cheap because they just want it.

Just to gain market share?

No, just to clear the stock, okay? When they want to clear the stock, that's what happens, all right? And that's what Janet Yellen says, you are dumping your excess capacity to the world, right, where no one can compete with you because you are just dumping. So of course, some countries can tell it, especially India. India always have antidumping duties. U.S. always have antidumping duties, but not all countries are like that. And even if you do file a complaint, it will take like 1, 2 years, 3 years before the thing kicks in. So competition definitely has intensified, all right? But I don't foresee it going back to the old historical profitability rate. I think we should still be better than 3, 4 years ago. Understand?

Okay. Packaging?

Packaging, yes. So in an industry environment for the packaging today, besides this pushback, do you see like a very big pushback in terms of the kind of products, the kind of pricing that you are actually rolling out right now?

There are a lot of converters who are willing to throw prices. They are also assessing their own situation, what is the breakeven? If I don't do, what happens? I got this few -- I got so many mouths to feed, I got so much equipment. So everyone is playing the game, all right? And therefore, if you cannot run efficiently, you are definitely going to lose money. If you look across the whole region, whether it's Indonesia, Philippines, Vietnam, Thailand, a lot of packaging companies are actually losing money. In fact, Malaysia is relatively okay. Yes, profits may be down, but we are still profitable. But many companies in Thailand and Indonesia, they're actually not making money because of the competition. So -- but we have to weather through this storm, all right? So we are also mindful that we now have a lot more capacity. So we are also competing. Therefore, if you look at our sales, it didn't drop much because we actually sacrifice on margin just to make sure that we keep producing. But it's still profitable, so it's okay.

The utilization rate and if you net off the new capacity, what does it look like right now actually? I mean, ballpark, I don't think you need to have yourself...

We were doing around -- before the new capacity comes in, we are doing around 2/3.

75%?

No. 2/3 is 67%?

Yes, 67%. Okay. In terms of -- remember in the last quarter, one of the strategies that you had with the new capacity for Stenta and Hexachase, you were trying to delay that because you saw the softening demand. Has it -- have you reached the end of how much more you can delay or it's like...

We have already guided that we will complete it in the second half -- second quarter. So second quarter is there.

Understood. Last question from me for packaging. Can you share the initial operating cost of the new added capacity? And I wish to know core PBT packaging division if excluded new added capacity expenses, okay?

The new capacity, if you don't run it, it will cost you about maybe MYR 800,000 to MYR 1 million a month if you don't run it. It means I got to carry out the cost of labor, depreciation, amortization without even running it.

Okay. I'm just scrolling through, I don't know...

I think basically, people want to also find out because you are referring resources and how the Chinese is dumping their products. For the Packaging business as well, what is your view on the infiltration of Chinese products in various industries in Malaysia, which carries a much lower price tag? And specifically to the Packaging division, when will this industry recover from the current down cycle?

I think that the world economy is going to turn, right? Because as long as the global economy doesn't grow and actually comes down, it will have a negative impact on pricing and competition. The product diversion is not just China to Malaysia, it's China to the world. And therefore, even our export markets are affected by it. So you have 2 choices, right? You either adjust price or you lose the business. So we will try to adjust price to the extent that we can, to the extent it makes sense. Of course, if you can't even cover variable cost, then no point.

Another question, how much cheaper are basically the Chinese products on ASP as compared to our Packaging business?

They can be true. They can really be true. I find it difficult that they can make money, but you never know. Sometimes the Chinese do surprise us. I still scratch my head sometimes how do they make money out of this kind of pricing? Either they have really as what Janet Yellen accused them of all the subsidies or they have government projects, which kind of help offset their margin. So I was scratching my head on another business within this group, not in Mega First, but what we encounter. So even the guys operate in China, but they are not a Chinese company, also scratch [indiscernible] actually, the cost is very transparent on raw material cost is like this, this is like this. And they also operate in China, so their labor cost can be too expensive compared to them. And yet they make money. And these guys lose money. So after a while, I finally received an article from the CFO. I know why really he showed me the article because they have other businesses, which has very high margin. And these businesses happen to be a government contract. So I don't know. This could be just an example. That's why in totality, they look okay. In totality, they look okay.

I understand. Any more resources done?

I think the resources and packaging is mostly done, yes.

Yes. Okay. One last one. This is a crystal ball question. I'm sorry. When will the industry recover from this current down cycle? That's why I say it's a crystal ball question.

Let me ask Trump tonight.

You got the hotline, right?

Yes, I got a hotline. Trump will tell me that everything hunky-dory. We are really struggling to -- we are struggling to understand what will happen next, all right? For the first time, you don't even know how to anticipate. Because you do know all these negotiations are all behind closed doors, individually done. And then you see different countries do different funny things like Qatar, they're buying a $400 million jet. And then Modi go and suck up to him and say, India will open this up, open that up. So it's very hard. So what we need to do is, again, in this kind of situation, we just have to look inwards, make sure that we are ready to face whatever challenges that come. And the natural thing is tighten your belt, cut your costs, lay off, avoid any unnecessary investments. In fact, investments and CapEx and all those are strictly on a need basis unless your plan will fail tomorrow, you don't invest. We have gone to that mode, just conserve cash and then just see what unfolds over the next 90 days or I'm sure they will still extend. You look at the way they extend. They will continue to extend and they will continue to come out with funny, funny policies. And then now you see the tax bill in the U.S. suddenly costs havoc in the bond market, the treasury all spike, U.S. dollar suddenly come down. And then maybe tomorrow is okay again because of what he does, so can you imagine if the tax bill somehow get modified. Then everything will reverse itself. Bond market will fly, interest rate will come down, currency will strengthen. It's really hard, it's really hard to predict.

And I'm glad that in a way, you're open and not trying to like make everything sound hunky-dory, I mean, in a way.

It's hard to be overly confident in this market, all right? But we are very fortunate that we have a very stable renewable energy income. And that is the majority of our earnings. We just need to deal with a little bit of problems here and there. And the biggest I'm telling you is Edenor. And we are focusing on that, all right? And we are guided not by emotion. We are guided by business sense. And because we do have the capacity to kind of help in stabilizing it, and we will do so. Can you imagine if you are not even in a position to do so? You just have to throw it away, just chuck it out. But we are in a position and we see the potential of turning it around. What has happened to the gas pipeline is beyond anyone's control.

[indiscernible] that one?

They claim it is. Let's wait for the police investigation to conclude. If the police investigation is negligence on the maintenance team, I tell you that all will gang up together and go...

Yes, that's the question. Is the disruption of gas supply, but I don't know, covered by insurance or not.

Because it force majeure maybe. But if it's negligence, then it's...

That question was raised in the AGM, and I said, well, let's see, okay? But gas Malaysia straight away, it's force majeure. So -- but I think it's still subject to challenge in court. It's a question of who wants to fight the first shot. So if the guy wins, I think everyone will just follow. And I don't think you can do anything until the police report is done, the investigation is completed and the formal report is submitted.

Yes. Okay. Are you okay, we move to...

Let's move to Food Security.

All right. So going straight to the top Food Security, okay. Hanwei Yoon again, noticing MFCB completed the acquisition of a 30% stake in Chiwadi. May I know more details of the -- of Chiwadi such as revenue, market share, customer regions, et cetera.

Chiwadi is quite interesting because Chiwadi is founded by a lady called Sarapee. She was a food technologist in a multinational company. And she came out about 12, 13 years ago to set up Chiwadi, and she's into doing product development for wellness and healthy products. And she only focused on coconut sap products. So she does coconut sap sugar, she does coconut sap flower vinegar and she does all -- because it has a lot of Umami in there, amino acid. So she develops a lot of food flavoring, marination, sauce, food dips, and she also start to go into other things like even cosmetics, snacks, F&B and others. And she was sourcing for raw materials because she was growing. And we were somehow introduced to each other, and we thought what she's doing fits into what we are doing. So we decided to kind of integrate so that we just focus on supplying raw materials and ingredients to her so that we use Thailand as a platform to sell into the world because Thailand is still a much better place compared to Malaysia and Cambodia for food products.

In terms of food processing, is it?

In terms of food processing technology, in terms of credibility to the world because they have a very developed food industries and very strong -- with very strong government support. So we saw that fit, and she also saw us as a very strong long-term large volume supplier of ingredients to her [indiscernible] So we -- she is growing. We are also constrained by our ability to supply because our trees are still very young. And as you know, in plantation, the cost is quite fixed. So as your yield goes up, your costs don't go up. So the average cost on a per tonne or per kg basis will continuously decline as your yield goes up over the next 10, 15 years, right, just like any tree, you talk about coconut, you talk about durians, you talk about mango, palm oil, everything, right? There's a yield curve in any long-term crops, even macadamia nuts, right, that we were producing. So we have seen improvement in the yield over the last 12 months, but it has not yet reached breakeven, okay? So we know when it will break even. I can't share that exact number with you, but there is a curve that we know when it's going to break even. And we think, hopefully, by next year or the following year, we can at least have enough yield to breakeven.

If you don't mind me asking, is it more of a time age constraint? Or is it more of a process optimization constraint or temperature?

Yes. Because we are only selling ingredients, what we do is we harvest the set. So each time we harvest the set, the cost of receiving the set is the same. But when -- after spending the cost, I received only 200 ml, versus oh my God, one -- the impact of the cost, right? So we are monitoring the yield very carefully. We are hoping that the yield will go. Of course, we can't -- we don't have historical data to depend on. I cannot tell you for sure how the yield curve will unfold. But we know from the farmers, this is a typical curve [indiscernible] typical curve. But is it like this or is it like this or is it like this? We -- only time will tell.

I see. I think they are also interested in where Chiwadi is in terms of -- customer region...

Because we don't have -- all right, coconut sugar has got a very big market, but these are the adulterated market.

Do you mind explaining that term?

Means if you go to the market and you say, I want to buy Gula Melaka. Okay, you just go to Lazada or Shopee. Just you type Gula Melaka and you can see the price differential. Some can be very cheap and some can be very expensive. And if it is organic and pure, it's the most expensive, right? And why is it the cheap one is so cheap? It's because it's adulterated and some are even fake. it's molasses, sugar molasses. They cook with pandans to give you that flavor like coconut flavor and they sell it as Gula Melaka, right? And what makes a difference in the channel is if you buy the adulterated one also neither, buy the really pure one. But it's so expensive, most consumers are not willing to pay. So what we are targeting is we are targeting the right at the top end. At the top end because we don't want to do adulterated ones. Adulterated one, you can't competed with kecap manis players in Indonesia, you know the kecap manis there.

I think they use the pure ones.

I think, kecap manis ones won't be so cheap.

It reminds me if I could draw parallel and see whether it's fair, it's like Manuka Honey, the real Manuka Honey, MG something -- yes, $200 a bottle versus $40 a bottle.

So what we intend to do, which is in line with Chiwadi's culture, corporate culture and business ethic is we want to go high end. We want to go pure. We don't want to go adulterated. If you cannot pay then, you are not my market.

I understand.

But there are people who want it. So in U.S. and Europe, where affordability is higher, they want it. Because they see the health benefits in it, they also like the natural taste of the coconut.

Related to that, and I think it also goes down to your CapEx plans because now with the partnership or JV with Chiwadi, in a way, your focus is more on the upstream, the yields, the operation of the plantation. So actually, he's asking, is there any update on coconut syrup refinery? I don't think that's the direction you guys are going through, right?

We are only -- okay, basically, we don't do much processing. We just tap and then make it into syrup. And syrup is in layman term, in simple term, it's just an evaporation process, all right? You just bring up the bricks from when you first harvest, it probably give you a bricks of about [ 13, 14 ] and we will raise it to about 77 so that it can be -- it has got a longer shelf life. Because those that you harvest, you don't process within the day, it will ferment.

Like a pasteurization process in...

No, you just have to process it. You've got to heat up, you're going to pasteurize it, you're going to process it on the same day because it ferments easily and when it ferments, your syrup won't be of high quality.

Understand. Fermentation. Okay. So yes, because he's asking yield, I think you've already partially answered it. It's asking when will we see significant improvement in yields per share average crop age. I think tree life virtually off...

The ones that we are harvesting have age of about 5, 6 years. So we are beginning to see the yield, but I was talking to some Indonesian parties. They say you -- the yield will probably only go up very significantly when it hits like 10, 15 years old. But it should continue to improve. So we are monitoring that because terrain is different, location is different. So we may have a different experiences compared to, say, Thailand or Indonesia. Our variety is also different. So that will all have an impact, but you don't run away from the fact that as the tree ages, the yield will continue to go up in any crop, that is mother nature.

Okay. I think just minding the time because it's closing into 2 hours already. Perhaps just very surface level questions about just any update about the hospital and then Bloxwich and also IST, how are they doing?

Hospital, we have just submitted online our application for KM, [indiscernible]. So we just submitted. So obviously, we're going to give them some time, and then we will engage with them and answer whatever questions or make whatever necessary changes necessary. Our target -- our time line target is still we hope to call for tender in the fourth quarter, and we hope to award it and maybe start construction. We hope to award it sometime maybe in first quarter next year. And then hopefully, construction can start soon after that. And it will take around 3 years plus. So now we are evaluating equipment. We are evaluating suppliers and orders. So it's still -- it's a little bit behind schedule, but we're still progressing well.

The financial structure for -- partnership is being...

The intention is we own 51, the doctors will own 49.

And sorry, just maybe some updates about the retail business, IST and Bloxwich.

For retail business.

We had our AGM. There was a nice mall, actually.

It is actually doing very well, better than what we expected. We are generating good rentals. Definitely will be profitable. It's looking good. We've got a lot of good feedback, very positive reviews. Quite a lot of KOL also goes there to promote the place. We are now making good use of the auditorium. The football field has always been good. The indoor basketball court has always been good. Our pickleball and padel is -- will be ready probably sometime in July, August. You can see that construction when you enter the car park right in front of you, you go straight down, that's where the pickleball and the padel court is. So that one should bring in more footprint and also create more activities. So right now, I think we have probably around 70-plus percent shops already open. Some are still under renovation, some are still waiting for license, especially the liquor ones, somehow very difficult to get.

This is the campus in [indiscernible] for those...

You can go to the IG, just look up, just search for the campus and please follow. I think right now, they have around 15,000 followers already. Before it was open, it's only like 3,000. Now it's about -- 1,500 before it was open.

IST, Bloxwich?

Okay. IST, as you know, we are doing machinery. And given the global outlook, everyone is holding back. So it's just going to be slow. And I don't think they're going to make much profit or loss either way. We just have to wait for a recovery in the cycle. Bloxwich is doing okay, profitable, continue to try to bring in new businesses. They bought over a tooling company in Kedah. So we are 2 million small little of it.

This is the OPT Precision.

So we will do our own tooling. We have our own stamping plants. So we just continue to grow on it, but it's a small -- it's a very small subsidiary, but it's not bleeding, so it's good. EPE is doing well. The switchgear company where Putra Heights has 60%, and we have 30%, is doing well. They just secured 2 contracts in the last 3, 4 months. First contract was, I think, MYR 100-odd million. Second contract is I think another MYR 130 million, MYR 140 million. And they hope to get another contract in the second half that will then bring total contract value to maybe MYR 300 million plus, MYR 400 million, and that will represent a double-digit growth year-on-year. So that's good. Our investment -- investment in the grid? Huge, I mean the amount of investments that we have to make to upgrade the reliability and the robustness of the grid, it will be huge.

[indiscernible] a lot of tailwinds.

Yes, I think so. I think so. I think so because there are only a couple of big players here and most of the volume will go to the big players and EPE is one of them.

[indiscernible] Last one question on -- 2 last questions.

Yes, I think Bloxwich, it's a Bloxwich.

They do about maybe MYR 30 million of sales, that kind of thing. Make profit of, you know, MYR 3 million, MYR 4 million.

Good question. What is an item under investment in quota shares that have been...

Investment in quota shares is mostly is D&O. It's been there for a long time at a very low cost. And I suppose it will continue to be there given that the price is expressed.

Yes. Last question. The treasury shares that are held by the group, are you considering to cancel them?

No, no, no, we don't intend to cancel them. We just park it there for the time being.

Okay. I think that's probably what we can answer for today. It's closing into 2 hours already.

And as usual, apologies if you felt that we have not managed to answer your question as usual. Mr. Yeow is more than happy to answer your questions. Please send them in via e-mail. For those of you who want a copy of the presentation deck for every quarter, I've just seen the latest update where they archive it based on quarter and in a very nice table. So it's all readily available for you.

We have a new website, please, go and visit.

There is a comment. I heard that AGM yesterday, there is a video showing Don Sahong. Do you think you can put it up?

I'm asking them to because it's a very huge file, but I'm asking them to load it.

It's 5 gigabytes. So I just...

So maybe we -- for those who want to stay back, we just play it. Those who don't want to watch, you can leave. Those who want to watch, we just play it now. Anyway, thank you, everyone.

Okay, thank you.