PETALING JAYA: Puncak Niaga Holdings Bhd’s better-than-expected results for the nine months ended Sept 30 announced on Monday came in with a catch.

Basically, a significant chunk of its revenue was based on the company’s hope that it would eventually get paid RM339mil from the Selangor Government as compensation for the delay in implementing a scheduled 37% water tariff hike.

The amount was Puncak Niaga’s total claim for loss in revenue over a nine-month period that started from Jan 1.

“We continue to hold the view that the 37% water tariff hike is unlikely to happen soon, as we believe unpopulist moves such as raising water tariff are out of the Government’s current agenda under current economic conditions,” a bank- backed brokerage said in an update on Puncak Niaga issued yesterday.

The total RM339mil claim for the nine months was classified as trade receivables, which means the company has yet to receive the money from Selangor.

On Monday, Puncak Niaga said its net profit for the nine months ended Sept 30 rose to RM138.6mil on revenue of RM1.42bil, boosted by the compensation yet to be received.

This made up about 80% of ECMLibra Investment Research’s full-year projection for Puncak Niaga.

“We are leaving estimates unchanged as current earnings are being driven in part by the water tariff compensation which still lacks clarity at the moment,” it said yesterday.

Shares in Puncak Niaga gained 4 sen to RM3.21 yesterday.

CIMB Research believed that the compensation issue would be resolved “within the next two months” after Pengurusan Aset Air Bhd (PAAB) begins its takeover of water assets in Selangor.

Puncak Niaga is one of three water treatment plant operators in Selangor, through 100%-owned Puncak Niaga Sdn Bhd. Meanwhile, 70%-owned Syarikat Bekalan Air Selangor Bhd (Syabas) has the sole water distribution right in Selangor.

Selangor government owns the remaining 30% stake in Syabas.

PAAB had recently proposed a RM20bil sukuk programme to spearhead the restructuring of the domestic water industry.

“We reckoned Puncak Niaga and other water entities will now likely negotiate directly with PAAB on the potential disposal of their respective water assets,” AmResearch said.

AmResearch valued Puncak Niaga at RM4.05 per share, based on a 10% discount to its break-up value.

The firm said Puncak Niaga’s status as a takeover target appeared “remote” now with the impending restructuring of the sector