Wednesday, May 2nd, 2018

 

App redesign haunts Snap as investors flee

x NEW YORK, May 2 — Shares of Snap Inc sank as much as 22 per cent to the lowest since its 2017 flotation today, after first quarter numbers showed it losing confidence among users and advertisers due to a widely-panned redesign of Snapchat. The…


US crude stockpiles surge to highest level this year, reports EIA

WASHINGTON, May 2 — US crude oil stocks rose sharply last week, bringing overall supply to its highest level since December, and gasoline inventories also rose, the Energy Information Administration said on Wednesday. Crude inventories jumped by…


EU hands Macron small eurozone budget victory

BRUSSELS, May 2 — The EU’s latest budget proposal handed French President Emmanuel Macron a small victory today by including a watered down version of the young leader’s idea of a eurozone budget. The European Commission, the EU’s executive…


Billionaire H&M chairman's buying spree triggers stock reversal

STOCKHOLM, May 2 — Hennes & Mauritz AB Chairman Stefan Persson may be single-handedly propping up shares in the Swedish fashion retailer. In April alone, the billionaire acquired about 18.2 million shares in Stockholm-based H&M for 2.46…


Johor Corp to relist QSR Brands by November, eyes RM2 billion from IPO

PETALING JAYA: Johor Corp’s (JCorp) 51.86% owned crown jewel, QSR Brands (M) Holdings, the operator of fast-food chains such as KFC, Pizza Hut and Ayamas, will make a comeback on Bursa Malaysia by year-end, in an initial public offering (IPO) which could possibly raise RM2 billion for the group.

Speaking at a press briefing on the state investment corporation’s 2017 financial results, group president and CEO Datuk Kamaruzzaman Abu Kassim said while it is premature to say anything with a degree of certainty, the relisting could take place no later than November this year.

Upon listing, the company’s market capitalisation could hit RM6 billion.
In 2013, KFC Holdings (M) Bhd and its holdings company QSR were taken private in a RM5.12 billion buyout by Johor Corp, the Employees Provident Fund (EPF) and private equity firm CVC Capital Partners via their special purpose vehicle, Massive Equity Sdn Bhd.

In 2011, QSR’s total assets stood at RM 2.728 billion.

According to the Companies Commission of Malaysia, the total assets of QSR Brands (M) Holdings for the financial year ended Dec 31, 2016 stood at RM4.936 billion.

On CVC and EPF’s interest upon listing, Kamaruzzaman said the partners will be looking at exiting the business, with the quantum of their selldown being determined by the IPO details.

QSR as a standalone entity contributed RM4.56 billion in revenue in 2017 (RM4.24 billion in 2016).

QSR has 1,268 restaurants under its wing and employs more than 35,000 workers across Malaysia, Singapore, Brunei and Cambodia.

Meanwhile, Kulim (Malaysia) Bhd which was a listed entity before being privatised in 2016, could possibly be making its re-entry to the local bourse in two years’ time.

Kamaruzzaman said the aim is to increase its plantation landbank to at least 100,000ha from the current 58,000ha first before relisting it.

Excluding the contributions from QSR, Johor Corp reported a 10.6% growth in net profit to RM459 million for the financial year ended Dec 31, 2017 against RM415 million a year ago. Revenue rose 4.1 % to RM5.58 billion from RM5.36 billion.

However, when the contributions of QSR are taken into account, the group’s total revenue would have exceeded the RM10 billion mark last year.

JCorp is cautiously optimistic on crossing the RM5.5 billion revenue mark again this year, with higher contributions from the healthcare division.

Kamaruzzaman said its healthcare arm KPJ Healthcare Bhd is expected to hit RM4 billion in revenue contribution in a year or two, up from the RM3.18 billion recorded last year.

KPJ Healthcare will be opening two hospitals this year, in Perlis and Bandar Dato Onn respectively.

Meanwhile, property arm Johor Land Bhd, which is undertaking the construction of 8,000 affordable homes in the state by 2025, has completed and delivered more than 1,000 units, with the rest in various stages of progress.


Public Bank’s first quarter earnings up 12.6% to RM1.41 billion

PETALING JAYA: Public Bank Bhd’s net profit jumped 12.6% to RM1.41 billion for the first quarter (Q1) ended March 31, 2018 against RM1.25 billion in the previous corresponding period, driven by the 4% and 15.6% growth in net interest income and non-interest income, respectively.

Revenue was up 6.4% to RM5.35 billion from RM5.03 billion.

The bank said in a filing with the stock exchange, its total gross loans grew at an annualised rate of 3% in Q1, with domestic loans growing faster at 5%.

Its gross impaired loans ratio was stable at 0.5% as at end-March against the 1.6% on the Malaysian banking industry.

Despite the implementation of MFRS 9 on Jan 1, 2018, Public Bank said, it did not result in any adverse impact to its capital position as the group has set aside large regulatory reserves.

Its common equity Tier 1 capital ratio, Tier 1 capital ratio and total capital ratio stood at 12.2%, 12.8% and 15.8%, respectively as at the end-March 2018.

It also maintained a healthy loan loss coverage ratio of 125.2%. Including additional regulatory reserves set aside of RM2 billion, the group’s loan loss coverage ratio would be 261.0%.

Looking ahead, Public Bank founder and chairman Tan Sri Teh Hong Piow said the group’s banking business will be supported by favourable domestic demand and resilient domestic economic growth.

“The group maintains a positive outlook for its core business focusing on financing of residential properties and commercial lending to small and medium enterprises. The group will stay agile to the advancement in financial technology, and will continue to enhance its digital capability in response to the needs of the market.

“Further, the group will continue to strengthen its banking infrastructure, product innovation and service quality as the strategic enablers to drive further business growth,” he added.

On Bursa Malaysia today, Public Bank was up 20 sen or 0.8% to close at RM24 on volume of 5.5 million shares.


Revenue Group secures Bursa Malaysia’s nod for ACE Market listing

PETALING JAYA: Revenue Group Bhd has received Bursa Malaysia Securities’ approval to list on the ACE Market by July this year.

The cashless payment solutions provider said its initial public offering (IPO) exercise involves the issuance of 55.71 million new shares, representing 25% of its enlarged share capital.

Of the 55.71 million new shares, 11.14 million will be available to the Malaysian public via balloting.

As part of the exercise, existing shareholders of Revenue Group will also make an offer for sale of 16.71 million shares by way of private placement to selected investors.

“The IPO will facilitate Revenue Group with greater financial flexibility to pursue future growth opportunities to widen our market reach and customer base in Malaysia as well as to retain and attract new, skilled employees in the electronic payments and IT Industry,” said its managing director and CEO Eddie Ng Chee Siong.

Proceeds from the IPO will be used mainly for capital expenditure to purchase about 9,000 units of new digital electronic data capture terminals with capability to accept Quick Response payment; enhancement of revPAY platform and expansion of its information technology team; repayment of bank borrowings; business expansion to Cambodia and Myanmar; and general working capital requirements.

M&A Securities is the adviser, sponsor, underwriter and placement agent for Revenue Group’s IPO.


Barakah auditors say borrowings, losses cloud ‘going concern’ status

PETALING JAYA: Barakah Offshore Petroleum Bhd’s independent auditors Messrs Crowe Horwath have raised concerns over its ability to continue as going concern due to the group’s losses and borrowings ended Dec 31, 2017.

It incurred a net loss of RM216.75 million and negative cash flow of RM71.83 million as at end-December 2017, while fixed deposits stood at RM102.71 million.

Barakah’s borrowings that are due for repayment in the next 12 months amounted to RM38.53 million as at end-December 2017.

It added that the group’s ability to continue as a going concern is dependent on the generation of sufficient cash flow from its operations, the partial release of the fixed deposits pledged as security for certain banking facilities and the recoverability of current tax assets.

Messrs Crowe Horwath said if Barakah is unable to continue in operational existence in the foreseeable future, the group may be unable to discharge its liabilities in the normal course of business and adjustments may have to be made.

“In addition, the group may have to reclassify noncurrent assets and liabilities as current assets and liabilities. No such adjustments have been made to these financial statements. Our opinion is not modified in respect of this matter.”

Nonetheless, Barakah stressed that its balance sheet is still at a manageable level despite the reduction in net assets.

“For FY2018, the company will focus on winning tenders and continue with cost rationalisation to sustain its operation and cash flow.”


Malaysian manufacturing conditions deteriorate further in April

PETALING JAYA: Malaysian manufacturing conditions deteriorated for the third successive month in April due to faster declines in output and new orders.

The Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) fell to 48.6 in April from 49.5 in March, an IHS Markit survey showed.

The Nikkei Malaysia Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 450 industrial companies.

IHS Markit economist Aashna Dodhia said the health of the manufacturing economy deteriorated at the strongest pace since October 2017 in April, reflecting lacklustre demand from domestic and international markets.

“Subsequently, total new orders and new export orders contracted at the fastest rates since July 2017 and December 2016 respectively.”

She noted that the recent build-up of inflationary pressures faced by manufacturers softened in April, with input cost inflation broadly in line with the historical average. However, output charge inflation was solid and the fastest since last September.

Aashna said on the bright side, business sentiment towards the 12-month outlook for output was at the strongest level since October 2013.

“As firms were upbeat about their prospects, firms continued to expand capacity by raising their payroll numbers.”

Reflecting weak demand conditions, purchasing activity fell across Malaysia’s manufacturing sector for the fifth successive month during April. The contraction quickened to a solid pace that was the fastest since the end of 2017.

Subsequently, both pre- and post-production inventories fell over the latest survey period.


Local manufacturing deteriorates further

PETALING JAYA: Malaysian manufacturing conditions deteriorated for the third successive month in April due to faster declines in output and new orders.

The Nikkei Malaysia Manufacturing Purchasing Managers’ Index (PMI) fell to 48.6 in April from 49.5 in March, an IHS Markit survey showed.

The Nikkei Malaysia Manufacturing PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 450 industrial companies.

IHS Markit economist Aashna Dodhia said the health of the manufacturing economy deteriorated at the strongest pace since October 2017 in April, reflecting lacklustre demand from domestic and international markets.

“Subsequently, total new orders and new export orders contracted at the fastest rates since July 2017 and December 2016 respectively.”

She noted that the recent build-up of inflationary pressures faced by manufacturers softened in April, with input cost inflation broadly in line with the historical average. However, output charge inflation was solid and the fastest since last September.

Aashna said on the bright side, business sentiment towards the 12-month outlook for output was at the strongest level since October 2013.

“As firms were upbeat about their prospects, firms continued to expand capacity by raising their payroll numbers.”

Reflecting weak demand conditions, purchasing activity fell across Malaysia’s manufacturing sector for the fifth successive month during April. The contraction quickened to a solid pace that was the fastest since the end of 2017.

Subsequently, both pre- and post-production inventories fell over the latest survey period.