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KUALA LUMPUR: CIMB Group Holdings Bhd, which saw a record net profit of RM5.58 billion for the financial year ending Dec 31, 2018 (FY18), expects a stronger performance in FY19 but remains cautious in view of sustained external headwinds. It is closely watching elections and political developments in Indonesia and Thailand.
Group CEO Tengku Datuk Seri Zafrul Aziz hopes for a better FY19, based on its forecast loan growth and given that markets are expected to be better. Despite some uncertainties in the region, Asean’s growth rate is expected to remain robust.
“Malaysia looks strong … costs continue to be in control and provisions, assets qualities numbers are quite good. We don’t see any problems. (For) Malaysia we’re positive, but we’ve got Thailand and Indonesia with elections. We don’t know what happens after their elections. Indonesia can slow down, Thailand also … so my concern is now more of outside Malaysia. We have 60% (of business from) Malaysia, 40% is still outside Malaysia,” he said after announcing the group’s FY18 results here today.
Zafrul said CIMB is aiming for loan growth of 6-7% for FY19, above the industry’s 5%, taking into account the growth in its other markets. It posted loan growth of 7% in FY18, supported by 10.5% growth in Malaysia.
The group’s gross impairment ratio stood at 2.9% as at end-December 2018, with an allowance coverage of 106.3%
Zafrul said net interest margin (NIM) will be relatively flat this year. The group’s NIM was lower at 2.5% in FY18, attributed to the contraction at CIMB Niaga. Return on equity (ROE) is also expected to be flat as the group is planning to make investments into technology this year.
CIMB’s net profit for the fourth quarter ended Dec 31, 2018 rose 5.4% to RM1.12 billion from RM1.06 billion a year ago, largely attributed to commercial banking and group funding, while revenue dipped 9.8% to RM4.07 billion compared with RM4.52 billion in the previous year’s corresponding quarter.
Its FY18 net profit was 24.8% higher at RM5.58 billion from RM4.48 billion in FY17, underpinned by strong performances from consumer and commercial banking, as well as lower provisions and costs. However, revenue was 1.4% lower at RM17.38 billion compared with RM17.63 billion in FY17.
The group declared a second interim net dividend of 12 sen per share, with the total dividend amounting to 25 sen. This translates to a dividend payout ratio of 50.8% of FY18 business-as-usual profits.
CIMB achieved its T18 financial targets scorecard, with its cost-to-income ratio coming in at 49.8%, common equity tier 1 at 12.6% and ROE at 11.4% in 2018. Income contribution from consumer and commercial now stands at 61% and it has a presence in the 10 Asean countries. Initiatives throughout T18 resulted in savings and cost avoidance of over RM2 billion from 2015 to 2018.
The group is expected to unveil its Forward23 five-year strategic plan in the next two weeks.
KUALA LUMPUR: Owing to forex translation losses of RM145.8 million, Tenaga Nasional Bhd (TNB) saw a net loss of RM134.30 million on revenue of RM12.55 billion for the fourth quarter ended Dec 31, 2018.
Due to the change in the financial year, the performance of the current year is not comparable against any period previously reported.
For the full year, its net profit jumped 42% to RM3.72 billion from RM2.62 billion a year ago, while the group’s revenue tripled to RM50.39 billion in FY18, compared with RM15.69 billion in FY17, on the back of higher sales of electricity.
TNB approved a 56% dividend payout ratio from the group’s adjusted profit after tax and minority interest of RM5.42 billion. This translates to a total of 53.27 sen per share for FY18, of which 23.0 sen per share will be distributed as the final single tier dividend.
TNB president and CEO Datuk Seri Azman Mohd said the stable returns ensured by Incentive Based Regulation has enabled it to reinvest heavily into ensuring the reliability and sustainability of the national grid while enabling increasing investments in renewable energy.
“We intend to forge ahead with our strategic plan that is aligned towards creating value for customers while supporting the government’s push towards MESI 2.0. This plan will enhance TNB’s business strategy of Reimagining TNB, started in 2015, towards sustainable development across the value chain, from generation to transmission and distribution as well as customer service.”
A total of RM11.82 billion capital expenditure was incurred in FY18 for maintaining, improving and modernising the power infrastructure to keep pace with the growing electricity demand as well to accommodate the growth of renewable energy in the country.
The company is embarking on a “grid of the future” project where eventually its grid network will be transformed into a smart, automated and digitally enabled grid. The upgrading of the National Grid into a new super highway will help TNB meet current and future electricity needs, especially at high load areas.
As TNB accelerates its drive towards sustainability, the company and its subsidiaries have started with clean power generation and offering green solutions such as smart home technology, energy efficiency and energy solutions.
TNB has increased its renewable energy (RE) generation capacity to 73.2MW through a 50MW Large Scale Solar project in Sepang, in addition to a few joint ventures in biomass and biogas power stations. TNB’s most recent venture is through its RE subsidiary, GSPARX, where the company offers self-generation finan-cing packages for solar photovoltaic panels for commercial, industrial and residential customers.
TNB expects electricity demand growth and the group’s performance to remain stable for FY19.
PETALING JAYA: BIMB Holdings Bhd’s net profit for the fourth quarter ended Dec 31, 2018 rose 7.85% to RM161.39 million from RM149.64 million a year ago due to higher profit contribution from both the Islamic banking and takaful businesses.
Revenue for the quarter rose 18.51% to RM1.12 billion from RM946.04 million a year ago.
During the quarter, Bank Islam Malaysia Bhd’s pre-tax profit rose 5% to RM184.5 million from RM175.8 million due to higher total income, driven by higher fund based income of RM121 million.
The bank attributed the growth to the increase in base rate and base financing rate by 25bps in February 2018, in response to the 25bps increase in Overnight Policy Rate on Jan 25, 2018.
Net financing assets grew 8.5% year-on-year to hit RM45.7 billion as at end-December 2018 from RM42.1 billion a year ago.
The bank recorded net allowance charged for impairment on financing and advances of RM19.4 million compared with RM5.4 million recovered a year ago. Net allowance charged for impairment on financing amounted to RM18.5 million while bad debts recovered were lower by RM6.3 million.
For Syarikat Takaful Malaysia Keluarga Bhd, pre-tax profit rose 83.6% to RM102.8 million from RM56 million a year ago due to higher net wakalah fee income. Operating revenue rose to RM701.5 million from RM517.7 million a year ago due to higher sales generated by family and general takaful business.
Family takaful business recorded gross earned contributions of RM497.6 million compared with RM316.5 million a year ago due to higher sales from credit-related products.
For general takaful, gross earned contributions rose 17.6% to RM166 million from RM141.1 million a year ago due to growth from fire and motor classes.
For the financial year ended Dec 31, 2018, BIMB’s net profit rose 10.04% to RM682.06 million from RM619.84 million a year ago while revenue rose 12.92% to RM4.2 billion from RM3.72 billion a year ago.
KUALA LUMPUR: FGV Holdings Bhd, which slipped into the red in the fourth quarter ended Dec 31, 2018, will be focusing on its transformation plans this year to return to the black, said group newly appointed CEO Datuk Haris Fadzilah Hassan.
Speaking at a press conference today, Haris said the group is planning to divest its non-core and non-performing assets with expected proceeds of RM350 million and rationalise up to six palm oil mills starting this year until year 2021 to improve utilisation.
“We have 68 mills (currently) and we are looking about (rationalising) two mills per year. It could be closing some of this less efficient plant with smaller capacity so that we can have better output growth,” he added.
On its replanting and age profile initiatives, Haris said the group will continue replanting at average of 15,000ha in 2019 with replanting cost approximately RM300 million per year.
He said this plan should continue until it achieves normalised age profile of 12 years by 2026, from 14.3 years currently.
Asked to comment on claims that the group will be delisted, Haris responded by saying that he prefers to focus on the group’s transformation and turnaround activities to maximise returns to the shareholders.
“I am not in the position to comment (on the issue) because this is subject to what the government and the stakeholders want to do. But I think there is a lot of potential in FGV,” he said.
For 2019, the group expects the CPO price to hover between RM2,000-2,500 per metric ton (MT) and targeting average CPO production cost (ex-mill) at RM1,469 per tonne.
FGV posted a net loss of RM208.8 million for the fourth quarter ended Dec 31, 2018 (Q4 2018), against a net profit of RM50.44 million in the previous corresponding quarter.
FGV said the results were largely hit by impairments and lower average CPO price realised of RM2,282 per metric tonne (MT) for the year.
For the quarter under review, the CPO price averaged at RM2,053 per MT, 24.6% lower RM2,723 per MT for Q4 2017.
Revenue for the quarter declined 24% to RM3.23 billion, from RM4.26 billion in the same quarter in 2017.
Asked whether there will be more impairments in the current financial year, Haris said he does not foresee any major impairments going forward, noting that the group has been taking prudent steps on its investments.
“The big ones is over. I think we have taken a lot of impairments last year. This is probably one of the milestone in the history. I don’t think there will be impairments of this size in the future,” he added.
For the whole of 2018, FGV registered a net loss of RM1.08 billion, from a net profit of RM130.93 million, while revenue decreased 20.4% to RM13.47 billion from RM16.92 billion previously.
PETALING JAYA: Malaysia Building Society Bhd’s (MBSB) net profit for the fourth quarter ended Dec 31, 2018 fell 4.9% to RM117.96 from RM123.98 million a year ago mainly due to lower charge of impairment allowances on loans and financing.
The lower charge was mainly due to improvement of staging from corporate portfolio for both Stage 1 and Stage 2 under Malaysian Financial Reporting Standards 9 and higher 2017 impairment following the impairment programme.
Its revenue also dropped 8.3% to RM750.35 million from RM818.27 million.
For the full-year period, MBSB’s net profit surged 54% to RM642.40 million from RM417.13 million a year ago due to lower impairment allowances; while revenue was 3.5% lower at RM3.15 billion compared with RM3.26 billion in FY17.
MBSB’s net profit margin stood at 3.06% (FY18), consistent with 3.08% (3Q18) mainly contributed by personal financing, corporate and global market portfolios.
On the group’s 2018 performance, MBSB group president and CEO Datuk Seri Ahmad Zaini Othman said 95% of 2018’s income was derived from the existing lines of business and the remaining 5% from new offerings.
Gross financing and loans trended upwards by 2.84% from RM34.2 billion (FY17) to RM35.17 billion (FY18) and consistent with RM35.85 billion (3Q18). Net impaired financing ratio stood at 2.39% (FY18) compared to 1.76% (3Q18) and 2.11% (FY17). The increase was due to impairment allowance write backs mainly for corporate portfolio in 4Q18.
The group’s deposit remains consistent with growth of 1.01% at RM32.78 billion (FY18) compared to RM32.76 billion (FY17). Liquidity coverage ratio stood at 210.33% (4Q18) from 154.96% (3Q18) due to higher stock of high quality liquid assets as well as lower total net cash outflows. Capital position remains strong as common equity tier 1 capital ratio stood at 20.096% as at Dec 31, 2018.
On 2019 outlook, Zaini said it takes cognizant of the challenges this year, economic and other factors but will keep to the technology transformation plans as these are key to ensuring its ability to compete in the industry.
“With new capabilities and channels, we shall be able to extend our market reach especially in the SME segment through products such as trade finance. Greater emphasis shall also be placed on fee income to be attributed from the retail segment.”
PETALING JAYA: DRB-Hicom Bhd registered a net profit of RM73.02 million in the third quarter ended Dec 31, 2018 compared with a net loss of RM70.03 million a year ago due to better operating financial performance across all business segments.
Revenue for the quarter rose 9.30% to RM3.17 billion from RM2.9 billion a year ago thanks to better performance of the automotive companies including the sale of X70 SUV by Proton, which was launched in December 2018.
In a filing with Bursa Malaysia, the group said its automotive segment recorded a higher revenue of RM1.95 billion compared with RM1.6 billion a year ago while the services segment recorded revenue of RM1.13 billion compared with RM1.08 billion a year ago.
However, revenue for the property segment was lower at RM85.44 million compared with RM229.47 million a year ago.
For the nine months ended Dec 31, 2018, DRB’s registered a net loss of RM5 million compared with a net profit of RM489.78 million a year ago while revenue fell 2.82% to RM9.01 billion from RM9.27 billion a year ago.
During the period, the automotive sector continued to be the largest contributor but revenue was lower at RM5.28 billion compared with RM5.30 billion a year ago as the previous year’s revenue included the Lotus marque, which was disposed off in September 2017.
For the financial year ending March 31, 2019, the group expects operating results to be better than the previous year’s financial results.
Since the official debut of Proton’s maiden SUV on Dec 12, 2018, Proton has delivered over 7,000 units of the X70 from about 18,000 bookings.