Thursday, August 17th, 2017


Impairment provision tips Hong Leong Industries into the red in Q4

PETALING JAYA: Hong Leong Industries Bhd swung into the red in the fourth quarter ended June 30, 2017, registering a net loss of RM104.57 million against a net profit of RM69.49 million in the previous corresponding period, due to a one-off impairment provision of the group’s investment in associate Malaysian Newsprint Industries Sdn Bhd (MNI) amounting to RM172 million.

Hong Leong Industries said it is no longer required to equity account for the future results of MNI as MNI has commenced creditors’ voluntary winding-up proceedings.

“In the event of any residual value from the liquidation process, the group will recognise any recoveries in future period,” Hong Leong Industries said in a filing with the stock exchange.

Hong Leong Industries' fourth-quarter revenue was marginally lower at RM569.01 million versus RM573.6 million in the same quarter a year ago.

Meanwhile, the group’S full-year net profit slumped 58.3% from RM247.22 million to RM103.09 million. However, revenue rose 4.2% from RM2.19 billion to RM2.28 billion.

Barring any unforeseen circumstances, Hong Leong Industries expects performance for both the consumer products and industrial products segments to be satisfactory for the financial year ending June 30, 2018.

Hong Leong Industries went down two sen to close at RM9.78 yesterday, with some 48,200 shares changing hands. It has a market capitalisation of RM3.21 billion.

Pos Malaysia delivers higher net profit in Q1

PETALING JAYA: Pos Malaysia Bhd’s net profit in the first quarter ended June 30 improved by 19.06% to RM 37.91 million from RM31.84 million in the same period last year on the back of higher revenue and better cost management.

Revenue increased by 47.07% to RM611.62 million from RM415.86 million in the preceding year’s corresponding quarter due to the inclusion of the logistics services that were acquired in the third quarter of last year.

“The revenue growth in the first quarter of our current financial year was largely driven by the inclusion of revenues from the Pos Aviation Group (formerly KL Airport Services Group) that was completed in September 2016 as part of our strategy to transform the Pos Malaysia Group to become a fully-integrated logistics services provider in the e-commerce ecosystem.

“We are confident that our value proposition as a fully-integrated e-commerce logistics player will continue to become more valuable as e-commerce continues its growth trajectory in Malaysia and the region going forward,” group CEO Datuk Mohd Shukrie Mohd Salleh said in a statement.

Its board of directors said in a Bursa Malaysia filing that prospects are positive for the remaining financial year due to recent upbeat global and domestic economic sentiments, which supports the growth of e-commerce that Pos Malaysia touts as the key driver for its revenue growth.

Furthermore, the Digital Free Trade Zone incentive, rebounds in exports and imports and continued roll out of transport infrastructure projects by the government are also seen as positive supporting factors for its business.

While the group foresees its aviation segment providing steady returns under the current operating conditions, its traditional mail segment is expected go through challenges.

Pos Malaysia’s shares gained 1.37 % to close at RM5.19 with some 108,100 shares changing hands. Its market capitalisation stood at RM4.06 billion.

Allianz Malaysia Q2 bottom line sags 12.9%

PETALING JAYA: Allianz Malaysia Bhd’s net profit fell 12.9% to RM66.48 million for the second quarter ended June 30, 2017 against RM76.29 million in the same quarter a year ago, due to lower contribution from the life insurance operations. Its revenue was up by 3.9% from RM1.15 billion to RM1.19 billion.

The group saw its first-half net profit decline 10.6% from RM149.47 million to RM133.65 million, with revenue rising 3.8% from RM2.32 billion to RM2.4 billion.

The insurer said in a filing with Bursa Malaysia that a total of RM2.2 billion was recorded in gross written premiums from January to June this year, representing a 3.9% growth compared with RM2.11 billion last year.

It expects the competition to intensify for the general insurance business following the second phase of motor and fire detariffication commenced in July 2017, where insurers have the flexibility to deviate pricing for the motor and fire portfolios within certain regulatory allowances.

“The general insurance subsidiary has taken key initiatives to remain competitive in this environment including building a technical pricing model, active portfolio and claims management as well as disciplined expense management,” it noted.

For the life insurance business, Allianz said it will focus on strengthening its distribution channels through the professionalisation and increased productivity of its agency force.

“It will generate growth from its investment-linked business with rider attachments, which cater for customers’ protection needs,” it added.

Allianz said it is confident that the insurance operations will continue to deliver satisfactory results in the remaining year.

At yesterday’s market close, its shares were unchanged at RM14.52, with some 24,900 shares changing hands. It has a market capitalisation of RM2.53 billion.

Score Option sues Glomac unit again

PETALING JAYA: Glomac Bhd’s wholly-owned subsidiary Glomac Alliance Sdn Bhd (GASB) has been served with an amended writ and statement of claim by Score Option Sdn Bhd (SOSB) claiming over RM154.8 million in damages over the proposed residential development of 90 acres of land in Puchong, Selangor.

In 2011, similar issues were brought up in a civil suit, which was struck off by the High Court and Court Of Appeal. Glomac said the plaintiff and its directors were declared insolvent.

In 2003, Glomac signed a joint venture agreement with Score Option to develop 90 acres in Puchong into 1,000 double-storey terraced houses for launch in early 2004. The project was to have had a gross development value of RM250 million.

A dispute between the two companies, however, led to the matter being brought to court. GASB managed to get a court order to compel SOSB to sell the land to GASB at RM77 million as per the joint venture agreement and restrain SOSB from interfering in its development plans.

GASB received the legal documents, dated Aug 10, 2017 from Score Option, claiming for a compensation sum of RM107.8 million for the loss of land; unspecified amount of loss of expenses of the project; and 22% of the gross development value (GDV) of the project or a minimum of RM47 million, whichever is higher.

The suit was based on the joint venture agreement dated Jan 17, 2003 between Score Option and GASB for the project in Puchong.

“The financial and operational impact of the pending litigation on the group is dependent on the outcome. The expected losses, if any, arising from this case is RM154.8 million, or more,” Glomac said in a stock exchange filing.

GASB will file a memorandum of appearance in due course and have its solicitor apply to strike out the suit. Case management is on Monday.

Glomac closed unchanged at 67 sen yesterday, with some 204,200 shares traded. Trading in its shares was halted for about 1½ hours in the morning session.

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Malaysian Pacific Industries Q4 net profit grows marginally

PETALING JAYA: Malaysian Pacific Industries Bhd fourth quarter ended June 30, 2017 was 3.4% higher on higher revenue and weaker US dollar.

The group made a net profit of RM40 million for the quarter under review, compared with RM 38.68 million for the same quarter in the preceding year.

This was on a 12.8% increase in revenue to RM389.13 million, compared with RM344.82 million for the quarter ended June 30, 2016.

For the financial year ended June 30, 2017 the group's net profit rose 12.9% to RM177.92 million, from RM 157.52 million for the same period in the preceding year.

Revenue for the financial year was 5.6% higher at RM1.54 billion, compared with RM1.46 billion for the same period in 2016.

The stock closed unchanged at RM14.1 today. It has a market capitalisation of RM2.8 billion.

Jaks Resources selling four parcels of land to Sunway for RM167.59m

PETALING JAYA: Jaks Resources Bhd's subsidiary Premier Place Property Sdn Bhd is selling 5.988 hectares of land in Sungei Penaga Industrial Park, Subang Jaya to Sunway Bhd's Sunway Supply Chain Enterprise Sdn Bhd for RM167.59 million.

The sale will mean a gain of RM150.98 million for Jaks, which will be used to repay bank borrowings and for working capital expenses.

Jaks share price was down two sen to RM1.41 today, with some 4.97 million shares changing hands. It has a market capitalisation of RM679.97 million.

Ringgit rebounds to close higher versus US Dollar

KUALA LUMPUR: The ringgit rebounded to close higher versus the US dollar today on mild buying for the local note, a dealer said.

At 6pm, the local unit was quoted at 4.2940/2970 against the greenback from yesterday's 4.2970/2000.

FXTM Chief Market Strategist Hussein Sayed said the US dollar turned weak, led by increased uncertainty over another US interest rate hike in 2017 and President Donald Trump's fiscal agenda after he abolished the Manufacturing Council and Strategy and Policy Forum.

“The Federal Reserve minutes showed policymakers were increasingly worried over soft inflation that could delay the timing for another US rate hike,” he said.

Meanwhile, the ringgit ended mixed against other major currencies.

It fell against the Singapore dollar to 3.1430/1464 from 3.1420/1447 on Wednesday and depreciated versus the yen to 3.8997/8032 from 3.8761/8795 yesterday.

The local unit increased versus the euro to 5.0261/0305 from 5.0369/0422 and strengthened against the British pound to 5.5311/5354 from 5.5358/5410 on Wednesday. — Bernama

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