Thursday, February 21st, 2019


US stocks dip on weak data from Europe, Japan

NEW YORK, Feb 21 — Wall Street stocks fell early today following lacklustre economic data from Japan and Europe while high-stakes trade talks between the United States and China resumed. About 20 minutes into trading, the Dow Jones Industrial…

Zimbabwe’s currency reality check puts plaster on deep wound

HARARE, Feb 21 — Zimbabwe’s decision to scrap a peg between its quasi-currency bond notes and the US dollar brings a welcome end to a failing monetary policy, but it is not the solution to a deeper crisis, economists said today. The Reserve Bank…

Russia indicts US investor for fraud, says lawyer

MOSCOW, Feb 21 — Russian investigators formally charged US investor Michael Calvey with fraud today following his controversial arrest, his lawyer said. Investigators presented him with the indictment on the charge of large-scale fraud as part of…

Higher fuel prices dent AirAsia X’s Q4 performance

PETALING JAYA: AirAsia X Bhd suffered a net loss of RM99.27 million in the fourth quarter ended Dec 31, 2018 compared with a net profit of RM84.42 million a year ago due to higher fuel prices.

In a filing with Bursa Malaysia, the airline reported an increase in average fuel price to US$89 per barrel during the quarter from US$69 per barrel a year ago, which resulted in a lower net operating profit of RM27.4 million from RM120 million a year ago.

In addition, the group provided an impairment on amount due from joint venture amounting to RM24 million during the quarter under review.

During the quarter, the group reported a 1% improvement in cost per available seat kilometre (CASK) to 12.27 sen while CASK ex-fuel improved by 16% from 8.22 sen to 6.94 sen a year ago, due to enhanced cost management.

Revenue for the quarter fell 5.93% to RM1.15 billion from RM1.22 billion a year ago.

For the financial year ended Dec 31, 2018 (FY18), the group also swung into the red registering a net loss of RM312.7 million compared with a net profit of RM98.89 million a year ago while revenue fell marginally to RM4.54 billion from RM4.56 million a year ago.

AirAsia X said its current forward booking trend and average fares for the first quarter of 2019 are within expectation and prospects are anticipated to remain encouraging.

The airline will be adding up to five aircraft through operating leases this year via AirAsia X Thailand while AirAsia X Malaysia will remain with 24 aircraft.

AirAsia X Malaysia will focus on maximising aircraft utilisation of its current fleet and leverage on the group’s strategy in new route launches as well as increasing frequencies of core routes.

The stock rose 1.75% to close at 29 sen today with 14.89 million shares traded.

Pharmaniaga’s Q4 profit down 79%

PETALING JAYA: Pharmaniaga Bhd’s net profit for the fourth quarter ended Dec 31, 2018 plunged 79.6% to RM4.44 million from RM21.7 million a year ago due to lower demand from government hospitals and higher finance costs.

In a filing with Bursa Malaysia, Pharmaniaga said its results in the corresponding quarter last year included a one-off compensation receivable in relation to a previous joint venture company in China.

The group said the lower profit was also due to recognition of prior years’ corporate tax.

Revenue for the quarter fell 2.7% to RM596.64 million from RM613.2 million.

Pharmaniaga declared a fourth interim dividend of 2 sen for FY18 to be paid on April 10, 2019.

For the financial year ended Dec 31, 2018 (FY18), its net profit fell 21.1% to RM42.47 million from RM53.82 million a year ago while revenue rose 2.6% to RM2.38 billion from RM2.32 billion.

Moving forward, the group expects the economic landscape to be challenging with moderate growth fueled by the government’s implementation of policies that are expected to boost private consumption and consumer spending.

The group said it will continue to focus on strengthening business synergies between its overseas subsidiaries, PT Millennium Pharmacon International TbK and PT Errita Pharma to tap into opportunities in the Indonesian market.

Maersk shares reel as trade war fears buffet outlook

COPENHAGEN, Feb 21 — Shares in the world’s leading container shipping group, AP Moeller-Maersk, plummeted today after the Danish firm made a weaker than expected profit forecast citing uncertainty over the US-China trade war. The company’s…

Top Glove prices US$200m maiden exchangeable bonds

PETALING JAYA: Top Glove Corp Bhd has priced its maiden exchangeable bonds in the principal amount of US$200 million (RM814 million) on Wednesday, via its subsidiary Top Glove Labuan Ltd.

The bonds have a tenure of five years and will mature on March 1, 2024. The bonds include an exchange option which enables bondholders to exchange their bonds for the company’s shares at an initial exchange price of RM6.20 per share.

The bonds, which were priced at an exchange premium of 20% with a coupon of 2% per annum, is the company’s inaugural offering in the international capital markets and marks the first exchangeable conventional bonds priced out of Malaysia, after almost a decade.

“Raising funds via the issuance of exchangeable bonds will enable us to refinance existing loans at a lower annual interest rate. This in turn, helps us to enhance our working capital and strengthen our financial position,” said executive chairman Tan Sri Dr Lim Wee Chai.

“Exchangeable bonds also enable investors to participate in the equity of our company upon exchange and allow them to benefit from an appreciation in the future share price,” he said in a statement today.

Top Glove said benefits of the bonds include lower funding costs due to the equity optionality embedded in the instrument; mitigation of exposure to fluctuating interest rates due to the fixed nature of the coupon under the bonds, resulting in a more efficient cashflow management; and diversification of funding sources.

The bonds also allow the group to naturally hedge its US dollar denominated funding instrument against the group’s revenue from its export business, which is mainly denominated in US dollar.

Sime Darby confident of better FY19 results after strong first half

PETALING JAYA: Sime Darby Bhd, which posted a 3.9% rise in its net profit for the second quarter ended Dec 31, 2018 (Q219), expects its FY19 results to be better than FY18 based on the strong results reported in 1H19.

“If you look at the half-year results, they’re already ahead of the game, compared to last year. We have a pretty good chance of being better than last year,” Sime Darby group CEO Datuk Jeffri Salim Davidson (pix) told a press conference after announcing its 1H19 financial results today.

Sime Darby’s net profit for Q219 rose 3.9% to RM317 million from RM305 million a year ago mainly thanks to its motors division with the absence of a loss of RM109 million from the group’s discontinued BMW operations in Vietnam in Q218.

Its revenue was 6.9% higher at RM9.42 million compared with RM8.82 million in the previous year driven by the industrial division.

For the six-month period (1H19), the group’s net profit fell 66.6% to RM542 million from RM1.62 billion a year ago which included profit from its discontinued operations.

For a like-for-like year-on-year comparison, Sime Darby’s continuing operations posted a 69.4% increase in net profit to RM542 million for 1H19, from RM320 million for the same period last financial year, supported by a strong showing in the group’s industrial division.

Its revenue for its continuing operations stood at RM18.27 billion in 1H19, representing a 7.7% increase year-on-year, from RM17.96 billion in 1H18.

The group announced an interim dividend of 2 sen per share for FY19.

Jeffri said Sime Darby’s performance in 1H19 was pretty solid due largely to its industrial division in Australia. Demand for its products and services from the mining and construction sector there have been strong.

“Results (1H19) were strong compared to last year and that strong trend, particularly industrial (division) will continue for the next six months,” he added.

However, it is seeing a slight softening in the group’s motors business, particularly in China and Singapore.

Sime Darby CFO Mustamir Mohamad said there is room for the group to gear up given its current gearing ratio of 21.6% against the optimal level of 60%.

“If we’re targeting to double our profit in the next five years, we have to do some acquisitions. We can’t do it organically,” he said, adding that any acquisitions will be mainly for the industrial division.

He said the group’s focus is in its industrial and motors divisions, where both divisions currently contribute 95% of its profit.

Meanwhile, it is also looking at opportunities to divest its logistics business, but not in a hurry to do so.

BAT earnings jump on lower operating expenses

PETALING JAYA: British American Tobacco (Malaysia) Bhd’s (BAT) earnings in the fourth quarter ended Dec 31, 2018 (Q4FY18) jumped 43.59% to RM116.37 million from RM81.04 million in the previous corresponding quarter, thanks to lower operating expenses.

The decline in operating expenses was due to the group’s continous effort in undertaking cost efficiencies whilst investing in strategic opportunities and segments.

BAT’s revenue for the quarter increased 12.52% to RM770.62 million compared with RM684.86 million in the same period a year ago, after cigarette prices increased by 40 sen per pack in November 2018.

It has proposed to declare an interim dividend of 47 sen per share.

For the full year of 2018, the group’s net profit declined 4.9% to RM468.53 million from RM492.64 million a year ago, while revenue went down 3.2% to RM2.82 billion, from RM2.92 billion previously.

On its prospects, BAT said it remains concerned with legal volumes continuing to be impacted by the current high incidence of illegal cigarette trade.

However, it said the group is very encouraged by the heightened enforcement with hopes that it will be intensified in the coming months.

The outlook for 2019 will be very much dependent on the recovery of the legal market, it added.

Anglo American profits rise on metals output, price rises

LONDON, Feb 21 — Mining giant Anglo American today posted a 12-per cent rise in annual net profits thanks to higher production and the rising price of metals. Profit after tax increased to US$3.5 billion (RM14.3 billion) in 2018 from a year…