ISF plans water technology venture to build recurring income

Malaysia’s ISF Group Bhd is finalising a joint venture aimed at helping state water authorities reduce non-revenue water, as the plumbing contractor seeks recurring earnings alongside its project business, group managing director Jeff Ai Boon Chen said.

The proposed partner is a Hong Kong-listed subsidiary of a major Chinese water company. The venture would offer smart meters and monitoring software using artificial intelligence, Ai told Business Times. The partner would provide technology and manufacturing, while ISF would coordinate local implementation and carry out work including pipe replacement.

Ai said ISF was negotiating with a state government in northern Peninsular Malaysia and was financing a proof of concept. Commercial options under consideration include profit-sharing arrangements or project fees accompanied by operation and maintenance contracts. He expressed hope for concrete progress by the third or fourth quarter of 2027.

Data centre projects remain an immediate source of revenue. ISF recorded net profit of RM25.34 million for the financial year ended Dec 31, 2025, up 163 per cent from RM9.64 million a year earlier. For the first six months of FY26, net profit was RM12.5 million and revenue reached RM57.6 million.

Ai said data centre work contributed more than 50 per cent of FY25 revenue and was expected to remain above that level in FY26. The company also undertakes piping work for industrial and commercial properties, water distribution and sewerage.

ISF has yet to declare a dividend and has no formal dividend policy. Ai said the group was retaining cash to finance projects and expansion.