Timah Resources Faces Operational Risks Amid Equipment Failures and Delays

Operational Setbacks and Financial Impact

Timah Resources Limited’s 2025 financial results reveal a company grappling with significant operational challenges yet managing to edge back into profitability. The group’s revenue fell by nearly a quarter to RM6.576 million, primarily due to a flashover incident at the main busbar switchgear that forced a prolonged 112-day shutdown of its biogas plant. This disruption led to an estimated net loss of RM1.2 million directly attributable to the outage.

Despite these setbacks, Timah Resources reported a modest profit of RM34,000 for the year, a notable turnaround from the RM3.517 million loss recorded in 2024. The recovery was supported by swift incident response and risk management protocols that enabled the plant to resume operations by September 1, 2025.

Efficiency Gains Amid Reduced Feedstock

Interestingly, the company achieved a 31% increase in average energy conversion efficiency, rising to 84.19 kWh per cubic metre of palm oil mill effluent (POME) processed, despite a 12% decline in feedstock intake. This improvement is largely credited to the commissioning of a new digester tank, which enhanced retention and processing efficiency within the plant.

However, the operational challenges extended beyond the initial flashover. A subsequent phase-to-phase short circuit in the 33kV underground cable further complicated repair efforts, which were delayed by extended lead times for critical spare parts sourced from China.

Insurance and Risk Mitigation

Timah Resources has lodged an insurance claim for RM313,199 to cover repair costs, with adjusters finalising their report amid a forensic investigation that has taken longer than anticipated. The company has also implemented a long-term mitigation strategy to reduce the risk of similar incidents recurring, including preparing additional spare units for critical systems to bolster plant reliability and response readiness.

Financial Position and Outlook

The group’s net tangible assets per share improved slightly to RM0.0004 from a negative RM0.0400 the previous year, reflecting the return to profitability. Cash flow from operating activities remained positive, though reduced, and the company continues to focus on restoring a stronger profitability trajectory while exploring opportunities to enhance shareholder returns.

While the 2025 results highlight resilience in the face of operational adversity, the path forward will depend on sustained plant reliability and the successful resolution of outstanding insurance claims.