Tuesday, November 27th, 2018

 

Fed official upbeat on economy, but rate hikes to be gradual

WASHINGTON, Nov 27 — The US economy faces fewer risks and is poised to continue to expand, but the central bank will move gradually to raise interest rates, a senior Federal Reserve official said today. Fed Vice Chairman Richard Clarida stressed…


Spain rejects China’s Silk Road plan

MADRID, Nov 27 — Spain will not sign on to China’s ambitious “One Belt, One Road” initiative that seeks to better link Asia and Europe, a senior government official said today ahead of a visit by President Xi Jinping. The…


Mitsubishi Motors says Nissan-Renault alliance can survive turmoil

OKAZAKI, Nov 27 — A senior executive at Mitsubishi Motors Corp said today its alliance with Nissan Motor and Renault SA can survive management upheaval, a day after it fired Carlos Ghosn as chairman over financial misconduct allegations. The…


US stocks fall as Trump speaks of more China tariffs

NEW YORK, Nov 27 — Wall Street stocks fell early today following hawkish comments from President Donald Trump on the ongoing trade dispute with China ahead of a key Group of 20 summit. About 10 minutes into trading, the Dow Jones Industrial…


Genting sues Twenty-First Century Fox, The Walt Disney Co for more than US$1b over theme park contract termination

PETALING JAYA: Genting Malaysia Bhd’s share price fell as much as 18.6% today on news that it is suing Twenty-First Century Fox Inc and The Walt Disney Co for more than US$1 billion (RM4.19 billion) for terminating their contract to develop a Fox-branded theme park at Resorts World Genting in Malaysia.

The Fox theme park is a key selling point of the Malaysian casino resort group’s multi-billion ringgit Genting Integrated Tourism Plan.

Genting Malaysia told Bursa Malaysia today it is suing Fox Entertainment Group, LLC, Twentieth-Century Fox Film Corp, FoxNext, LLC (collectively known as FOX), Twenty-First Century Fox, Inc (21CF) and The Walt Disney Co for the termination of a memorandum of agreement (MoA) relating to the theme park project.

The Walt Disney Co is in the process of acquring Twenty-First Century Fox.

Genting Malaysia was the most actively traded counter on the local stock market today, closing 16.7% lower at RM3.00 with some 276.3 million shares traded. It opened lower at RM3 and fell as much as 67 sen from its last adjusted closing price of RM3.60, to trade at a low of RM2.93.

In a filing with Bursa Malaysia, Genting Malaysia said it has filed legal proceedings in the US against FOX, 21CF and Walt Disney, in response to a notice issued by FOX in which it terminated the MoA and claimed about US$46.2 million (about RM193.6 million) in accelerated payments.

“Genting Malaysia denies that FOX had grounds to terminate the MoA, denies any liability resulting therefrom, and has pursued cause of action against FOX for breach of contract, and breach of the implied covenant of good faith and fair dealing, among others,” it said.

The group has also pursued cause of action against Disney and 21CF for inducing breach of contract and for interference with contract.

The group said it intends to fully enforce its rights under the MoA, claim for the cost of its investments and consequential and punitive damages that in total will exceed US$1 billion, and such other reliefs to be determined by the court.

Genting Malaysia said the litigation is not expected to impact its current business operations. It said the validity of the causes of action as well as the availability and extent of Genting Malaysia’s damages cannot be ascertained at this juncture.

To recap, Genting Malaysia entered into the MoA dated June 1, 2013 with Twentieth-Century Fox Licensing & Merchandising, a division of Fox Entertainment Group, Inc. Genting Malaysia was granted a licence to use certain intellectual property rights associated with Fox theatrical motion pictures in connection with the design, development, construction and operation of what was to be called the Twentieth-Century Fox World Theme Park. The MoA was subsequently amended on June 10, 2014 and June 9, 2017.


EU to take next step in disciplinary action over Italy debt this week

BRUSSELS, Nov 27 — EU government representatives are set to back on Thursday the European Commission’s disciplinary move against Italy over its debt, according to two European Union sources and a document seen by Reuters. The move is expected to…


Higher revenue lifts Petronas’ Q3 net profit to RM14.3 billion

PETALING JAYA: Petroliam Nasional Bhd’s (Petronas) net profit for the third quarter ended Sept 30, 2018 rose 43% to RM14.3 billion from RM10 billion a year ago due to higher revenue.

The group said in a statement today that the higher revenue was partially offset by higher product costs in tandem with higher prices, coupled with increased depreciation and amortisation.

Earnings before interest, taxation, depreciation and amortisation (ebitda) rose 25% to RM26.9 billion from RM21.5 billion a year ago.

The state-owned oil company attributed the higher earnings to its continuous execution of business improvement activities, focused on increased operational excellence and supported by higher commodity prices.

Revenue for the quarter rose 19% year-on-year to RM63.9 billion, mainly driven by higher average realised prices for key products coupled with increased efficiency throughout the group.

Higher sales were partially offset by the strengthening ringgit and lower sales volume, mainly for liquefied natural gas (LNG). Capital investments for the quarter stood at RM6.7 billion, mainly attributed to upstream projects.

For the nine months ended Sept 30, 2018, Petronas’ net profit rose 50% year on year to RM41 billion, due mainly to higher revenue, lower net impairment on assets as well as other expenses. These were partially offset by higher product costs in tandem with higher prices coupled with increased depreciation and amortisation as well as tax expenses.

Revenue for the period rose 12% year-on-year to RM181.1 billion mainly due to the impact of higher average realised prices for key products as well as increased efficiency efforts, largely offset by the effect of the ringgit strengthening against the US dollar.

Capital investments for the period stood at RM26.5 billion mainly attributed to upstream projects while total assets rose to RM623.1 billion as at end-September, compared with RM599.8 billion as at end-December 2017.

Shareholders’ equity rose to RM402.1 billion as at end-September from RM389.8 billion as at end-December 2017. The gearing ratio remained at 16.1% while return on average capital employed rose to 12.6% from 9.8% during the same period.

The Pengerang Integrated Complex achieved 95% progress as at end-September and successfully received its first crude oil cargo at the Pengerang Deepwater Terminal 2. The project is on track to be ready for startup in 2019.

President and group CEO Tan Sri Wan Zulkiflee Wan Ariffin said Petronas is on track to deliver a strong year-end performance by maintaining focus on driving efficiency efforts across its operations.

“The recent drop in oil prices demonstrate the volatile and cyclical nature of the industry and we will continue to maintain our prudent outlook amidst this landscape while remaining steadfast in pursuing our growth strategies to ensure the long-term sustainability and progress of the company,” he said.


MMC third quarter earnings more than double to RM38.94m

PETALING JAYA: MMC Corp Bhd’s net profit for the third quarter ended Sept 30, 2018 more than doubled to RM38.94 million from RM18.94 million a year ago, in the absence of provision for impairment.

In a filing with Bursa Malaysia today, the group said its pre-tax profit for the quarter was higher mainly due to the absence of a one-off provision for impairment of RM98 million on Stormwater Management and Road Tunnel as a result of lower projected traffic volume; and recognition of negative goodwill of RM51.7 million from acquisition of remaining 51% equity stake in Penang Port Sdn Bhd, which is a wholly owned subsidiary of MMC Port Holdings Sdn Bhd, which in turn is a wholly owned subsidiary of MMC.

This was offset by lower contribution from Johor Port Bhd and Northport (Malaysia) Bhd; Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (KVMRT-SSP) Line and no forfeiture deposit on land sale transaction at Senai Airport City.

Revenue for the quarter fell 10.58% to RM944.08 million from RM1.06 billion a year ago due to lower work progress from KVMRT-SSP Line, lower contribution from Rapid Material Offloading Facilities operations at Johor Port and lower container volume handled at Northport.

These were cushioned by work progress at Langat Sewerage Treatment project, higher volume handled at Pelabuhan Tanjung Pelepas as well as effect from consolidation of Penang Port’s revenue.

For the nine months ended Sept 30, 2018, net profit fell 25.59% to RM100.37 million from RM134.87 million a year ago while revenue rose 17.06% to RM3.42 billion from RM2.93 billion a year ago.

Moving forward, the group expects its ports and logistics division to record stable volume across all ports while the completion of acquisition of the balance 51% interest in Penang Port in May 2018 will contribute positively to the group’s earnings.

The energy and utilities division is expected to contribute positively from the group’s associated companies namely Malakoff and Gas Malaysia.

In the engineering division, substantial existing order book provides earnings visibility, anchored by the KVMRT-SSP Line underground work and elevated portion. Earnings from this division will also be sustained by the Langat 2 Water Treatment Plant, LSTP and the group’s involvement in the Pan Borneo Sabah Highway.

“We are optimistic of our performance and will continue to improve our operations, intensify our cost optimisation efforts and explore new business opportunities,” said MMC group managing director Datuk Seri Che Khalib Mohamad Noh in a statement.


Comfort Gloves products taken off US import alert list

PETALING JAYA: Comfort Gloves Bhd’s examination gloves will no longer need to be inspected prior to their entry into the US, after wholly owned subsidiary, Comfort Rubber Gloves Industries Sdn Bhd (CRGISB) was taken off the US Food & Drug Administration (US FDA) Import Alert List.

“The board of directors of the company wishes to announce that its wholly owned subsidiary, CRGISB has on Nov 27, 2018 received a letter from the US Food & Drug Administration informing that CRGISB has been removed from the Import Alert list of the US Food and Drug Administration,” it told the stock exchange.

To recap, the glove maker was admitted to the list on March 15 and in a filing dated April 6, the group said it was working towards its removal from the list.

On Bursa Malaysia today, Comfort Gloves fell 2.13% to 92 sen with 1.02 million shares traded.


Dutch to tighten tax rules for multinationals after EU pressure

THE HAGUE, Nov 27 — The Netherlands said it will tighten rules on tax breaks for foreign firms after facing criticism from the EU for offering complicated schemes for multinationals. Dutch authorities said they were cracking down on “letter box…