Tuesday, June 25th, 2019


Euro zone yields test lows as focus turns to under-fire Fed

LONDON, June 25 — German government bond yields fell to a record low today before a speech by Federal Reserve chief Jerome Powell, who is coming under strong pressure from US President Donald Trump to cut rates sharply. As major central banks…

Ireland to run budget deficit of up to 1.5pc if no-deal Brexit

DUBLIN, June 25 — Ireland presented two budget strategies for 2020 today, a preferred option that would see its budget surplus grow if its neighbour Britain leaves the EU in an orderly way, and a no-deal Brexit scenario forecasting a deficit to…

US consumer confidence hits 21-month low as tariff fears bite

WASHINGTON, June 25 — Anxieties jumped among American consumers this month as President Donald Trump’s trade wars dragged on, sending an index of consumer confidence to a 21-month low, survey data showed today. Greater shares of the public now…

Bombardier sells regional jet division to Mitsubishi for US$550m

MONTREAL, June 25 — Canadian manufacturer Bombardier announced today the sale of its CRJ Series regional jet program to Japan’s Mitsubishi Heavy Industries (MHI) for US$550 million, effectively exiting the commercial passenger aircraft sector….

Wall Street edges lower as Iran tensions mount

NEW YORK, June 25 — Wall Street had a subdued open today as markets digested Washington’s latest round of sanctions on top Iranian officials including supreme leader Ayatollah Ali Khamenei. Investors also remained cautious ahead of this week’s…

FGV shareholders shoot down payment of directors’ fees

KUALA LUMPUR: The assurance from FGV Holdings Bhd that it has been progressing well failed to excite shareholders at the company’s five-hour long AGM today, which instead saw the rejection of resolutions pertaining to its directors’ remuneration .

After the release of its second letter to shareholders detailing the turnaround plan just days ago, the loss-making plantation giant’s board of directors was grilled by shareholders over remuneration.

Some 64.4% of the shareholders at the AGM, led by Felda, Koperasi Permodalan Felda (KPF) and the Armed Forces Fund Board (LTAT), voted against resolutions relating to its directors’ remuneration.

The resolutions include directors’ fees amounting to RM2.55 million in respect of the financial year ended Dec 31, 2018; the payment of a portion of directors’ fees payable to the non-executive directors up to RM1.18 million from June 26, 2019 until the next AGM to be held in 2020; the payment of benefits payable from June 26 until the next AGM to be held in 2020.

The resolution to grant authority to the directors to allot and issue shares pursuant to Section 75 of the Companies Act, 2016 was also rejected.

“Shareholders’ message to us is that we want you to work but we don’t want to pay you,” FGV chairman Datuk Wira Azhar Abdul Hamid told a press conference after its AGM.

He revealed that institutional investor Employees Provident Fund (EPF) had raised concerns regarding the board’s remuneration, particularly his position, to which he volunteered to waive his fees with hopes that the resolutions regarding the remuneration would be passed.

However, the resolutions were blocked by Felda, KPF and LTAT which own 33.7%, 5% and 1.25% stake in FGV, respectively. The EPF, however did not reject the proposed resolutions on remuneration, according to Azhar.

Other resolutions such as the re-election of directors were passed.

Having just concluded the AGM, FGV’s board of directors is still contemplating its next move. Azhar did not discount the possibility of the board continuing their roles “for free”.

He said that in corporate Malaysia, FGV’s position is unique as being a board member of FGV is not the same as being a board member of a company that is doing well that could execute investment strategy and has a lot of cash in hand.

“The current board is not there for the directors’ fee but is a board that came in with eyes open and full understanding of FGV. We have actually volunteered to go through the hardship of turning around FGV.”

“In making any decision, it won’t be just about the fees but also the journey we’re trying to craft out with FGV,” he added.

FGV reported a net loss of RM3.37 million for the first quarter ended March 31, 2019 compared with a net profit of RM1.13 million a year ago.

Meanwhile, Azhar said there has been no formal discussion or renegotiation of FGV’s land lease agreement (LLA) with Felda as touched in the shareholders’ letter earlier. “What was outlined in the letter was the status quo in regard to the LLA. As chairman, I have to look at all possibilities and evaluate the impact on FGV.”

George Kent Q1 earnings down 37%

PETALING JAYA: George Kent (Malaysia) Bhd’s net profit for the first quarter ended April 30, 2019 fell 37.28% to RM13.51 million from RM21.54 million a year ago due to the lower contribution from the engineering division.

In a filing with Bursa Malaysia, the group said that its engineering division reported a 23% drop in segment profit to RM16.38 million from RM21.31 million a year ago, due to a 30% drop in revenue to RM51.43 million from RM72.99 million a year ago.

Construction accounts for 90% of the revenue and 88% of segment profit of the engineering division.

The metering division’s segment profit was also lower, declining 18% to RM4.99 million from RM6.09 million a year ago due to lower gross profit margin. Revenue for the division rose 17% to RM31.35 million from RM26.78 million a year ago.

George Kent’s revenue for the quarter fell 17.02% to RM82.78 million from RM99.76 million a year ago, due to lower revenue from the engineering division.

Chairman Tan Sri Tan Kay Hock (pix) said the group’s first quarter results are credible, despite making a small loss on LRT3 as construction work is only expected to begin towards year-end.

“This demonstrates the robustness of the group’s businesses. Our metering division fulfilled increased orders during this period, whilst our effective project management and execution contributed to improved margins and profits for the engineering division,” he said in a statement.

“I am encouraged by the increasingly strong demand for our water meters. We continue to add new markets. We are working towards manufacturing the imported precision components, in order for us to become an integrated water meter manufacturer. This will give us better control over our water meter supply and enhance our margins,” he added.

He said the group’s expertise and experience as a rail systems integrator puts it in a favourable position to compete for domestic rail projects and the group has a dedicated team to actively pursue railway opportunities in the region.

“Similarly, with the successful completion of over 30 water infrastructure projects in the last 26 years, the group is well-positioned to explore opportunities arising from the Malaysian government’s drive to resolve the country’s non-revenue water issue. The group is committed to delivering on our order book of over RM5 billion,” he said.

Agriculture secretary says US farmers are ‘casualties’ of trade war, reports CNN

WASHINGTON, June 25 — US Agriculture Secretary Sonny Perdue acknowledged that American farmers are “casualties” of President Donald Trump’s trade war with China, according to an interview broadcast today. Perdue told CNN he did not expect a…

US biopharmacy company AbbVie to buy Botox maker Allergan for around US$63b

PARIS, June 25 — US biopharmacy company AbbVie said today it had agreed to buy Allergan, the maker of Botox, in a stock and cash operation worth about US$63 billion. The offer represents a 45 per cent premium over yesterday’s share price of…

Astro posts RM176m profit in first quarter

PETALING JAYA: Astro Malaysia Holdings Bhd’s net profit increased slightly by 0.8% to RM176.2 million for the first quarter ended April 30, 2019 against RM174.73 million in the previous corresponding period, thanks to lower net finance costs and lower tax expenses.

Its revenue, however, slipped 5.8% to RM1.23 billion from RM1.31 billion, due to a decrease in subscription revenue.

The group has proposed to declare an interim dividend of 2 sen per share for the quarter under review.

Astro told Bursa Malaysia that its digital advertising expenditure (adex) grew 13% to RM9 million and achieved total adex of RM145 million.

While total adex declined 4%, the group said it outperformed the industry adex, which saw a 9% contraction.

Astro’s television earnings before interest, taxes, depreciation and amortisation (ebitda) decreased 3.1% due to lower revenue and higher impairment of receivables, offset by lower content costs and marketing and distribution costs.

Radio ebitda declined 10.3% to RM29.7 million on the back of an unfavourable operating environment leading to lower client advertising spend.

Looking ahead, Astro said the market is increasingly challenging, with ongoing structural changes in the global content and media industry and threat of piracy.

However, the group noted that it is focused on strengthening its core Pay TV and NJOI businesses by elevating its customer service, redefining customer value propositions and refreshing its content.

“By leveraging on its TV, OTT(over-the-top) radio, digital, events, talents and its customer base, the company is building new revenue adjacencies in broadband, OTT, exporting content, data driven marketing network and commerce to drive stronger customer engagement.