KUALA LUMPUR: Elridge Energy Holdings Bhd is bullish about its prospects for the financial year ending Dec 31, 2026 (FY26), supported by firm demand for biomass fuel and ongoing capacity expansion across its operations.
Executive director and finance director Salihudin Mohd Razali said the group expects improved earnings compared with the previous year, underpinned by sustained demand from key markets and efforts to scale up production capacity.
“We are projecting better results than last year. If not, we would not go for expansion unless we are confident we can deliver,“ he told reporters after the company’s second annual general meeting today.
Salihudin said the positive outlook is driven by robust demand for its core product palm kernel shells (PKS), which is used in renewable energy generation and industrial applications, amid increasing adoption of biomass energy in markets such as Japan, Thailand and the Philippines.
Elridge has been expanding its capacity since its initial public offering (IPO) to capture this demand, with new facilities coming onstream and existing operations being ramped up.
The group said customers are providing three to six months’ forward visibility, enabling the group to plan production more effectively.
Demand remains strong, and sales are not a concern; the key priority is ensuring sufficient supply to meet customer requirements.
The group is operating at about 70% utilisation across its facilities, indicating headroom to increase output from existing operations even as it continues to expand capacity to meet rising demand.
To support growth, Elridge has brought its Kuantan, Pasir Gudang, and Lahad Datu facilities into operation, although both are still ramping up. In Kuantan, the group is operating from a rented facility as an interim measure while working towards developing a permanent plant.
Salihudin said construction of the Kuantan facility has yet to commence as the group continues to finalise land acquisition and obtain the necessary regulatory approvals.
He added that land prices have risen following the company’s listing, and the group is taking a measured approach to ensure it secures a suitable location at the right value.
“Our funds are ready, but we need the right location and approvals. It takes time, so in the meantime, we are renting to capture demand,“ Salihudin said.
He noted that about RM50 million from the group’s IPO proceeds remains unutilised, primarily earmarked for the Kuantan expansion, and that no additional fundraising is required at this stage.
Salihudin said the group expects the permanent plant to be operational by early next year, subject to the successful completion of land acquisition and regulatory approvals.
Despite the delay, he maintained that expansion remains demand-driven, with existing customers requesting higher volumes.
Direct sales to Japan currently account for about 20% of revenue, compared with about 30% previously, although management said this does not reflect underlying demand, as some sales recorded as local transactions are ultimately exported by traders.
Elridge Energy said PKS prices have remained relatively stable, with increases of about 5% to 10% compared with earlier levels. The group typically renegotiates prices annually with customers and maintains a mix of long-term contracts and spot sales.
Elridge acknowledged increasing competition among traders, particularly on pricing, but noted that demand for biomass fuel continues to outpace supply.
On the balance sheet, Elridge said all trade receivables from FY25, totalling about RM89.8 million, have been fully collected, while outstanding amounts of about RM107.7 million for the first quarter of FY26 are expected to be substantially recovered by the next quarter.
Salihudin said the increase in receivables was driven by higher sales and credit terms extended to customers, most of whom are long-term trading partners, adding that the balances remain within agreed credit terms and do not reflect any overdue or impaired accounts.
“The increase in receivables is mainly due to higher sales and the credit terms we extend to our customers, and we expect these amounts to be collected in the next quarter,“ he added.
The company said the outstanding balances are still within normal collection cycles, despite being higher. “We have been working with these customers for many years, and they have consistently delivered, so we are confident that collections will come through.”
Separately, Elridge Energy’s planned expansion into Saudi Arabia remains at a preliminary stage, with progress temporarily stalled due to ongoing geopolitical uncertainties in the Middle East.
Salihudin said the biomass fuel producer is still in discussions with its potential partner following a memorandum of understanding signed in January, but has yet to formalise any agreements or commence on-ground work.
“We are currently still in discussion with them. Nothing has been put to paper as yet,“ he added.
Salihudin noted that while the group continues to see strategic potential in the Saudi market, current conditions have made it difficult to advance feasibility studies or to execute projects. “We know what is going on in the Middle East. For now, we are still in discussion until we have some clear direction where the situation is going to stabilise.”
Operational progress is effectively on hold as the group is unable to conduct site visits or technical assessments under the current circumstances, Salihudin said. “We can’t go there and do business. We have to wait until it settles down.”
Despite the delay, Elridge Energy remains optimistic about the longer-term prospects of entering the Saudi market, particularly in light of the country’s energy transition plans under Vision 2030.
“Saudi Arabia is also going green. They are heavily reliant on oil and gas, but they are moving towards a more balanced energy mix. We see opportunity in that,“ Salihudin said.
However, he acknowledged that any potential contribution from the Saudi initiative is unlikely in the near term, as the project remains exploratory with no defined timeline for execution or revenue generation.
The Saudi venture marks Elridge Energy’s first significant step outside its core Asia-Pacific markets, where it currently derives most of its demand from countries such as Japan, Thailand and the Philippines.
For now, the group’s growth trajectory remains anchored in these markets, supported by rising demand for biomass fuel, particularly PKS.
Salihudin said the group will continue to monitor developments in the region and resume engagement once conditions improve. “Of course, we want to explore further on that, but for now we have to wait until things stabilise.”
