expansion plans


Chatime Malaysia outlines aggressive expansion plans

KUALA LUMPUR, Jan 21 — After recording an impressive business growth within one year of a ‘comeback’, food and beverage provider Chatime Malaysia Sdn Bhd aims to be the world’s biggest Chatime operator by year-end. Group managing director…

Malaysian dropship platform Kumoten makes selling a breeze for e-commerce merchants

PETALING JAYA, Jan 10 — With more consumers shopping for goods online, internet marketing services and dropshipping platforms have become vital for e-commerce merchants and marketplaces. In Malaysia, aspiring e-commerce retailers looking to earn…

Starbucks’ expansion runs out of steam in South Africa

JOHANNESBURG, SOUTH AFRICA: High operating costs and tight customer budgets have left US coffee giant Starbucks needing a caffeine hit after it abandoned ambitious expansion plans in South Africa – seen as a foothold for the continent. Starbucks looked set to take the country by storm when the opening of its first store in the Rosebank […]

BFood posts 21% increase in Q2 net profit

PETALING JAYA: Berjaya Food Bhd’s second quarter net profit ended Oct 31 was 21.0% higher due to higher profit contributions from Starbucks Coffee operations in tandem with the higher revenue achieved.

In addition, the group had ceased consolidation of the losses from its Kenny Rogers Roasters (KRR) operations in Indonesia following its disposal in the previous financial year.

The group made a net profit of RM7 million for the quarter under review, compared with RM5.8 million for the corresponding quarter in the preceding year.

This was on 35.9% higher revenue of RM166.6 million, compared with RM160.8 million for the corresponding quarter in 2017 mainly due to the same-store-sales growth recorded by Starbucks as well as additional Starbucks cafes operating in Malaysia.

The board has recommended a second interim dividend of one sen per share in respect of the financial year ending April 30, 2019 to be payable on Jan 25, 2019. The entitlement date has been fixed on Jan 9, 2019. Total dividend declared for the financial period ended Oct 31 amounts to two sen per share.

The group is engaged in developing and operating the Starbucks Coffee brand in Malaysia and Brunei, developing and operating the KRR chain in Malaysia as well as Jollibean and two other brands in Singapore.

The key factors that affect the performance of all food and beverage businesses include mainly the festive seasons, tourism, eating out culture, raw material costs, among others.

The board believes that the renewed consumer confidence level, coupled with the group’s expansion plans, will fuel the group’s business growth and should augur well for the group’s operations going forward.

For the cumulative six month period ended Oct 31, the group posted a net profit of RM13.3 million, compared with RM11.2 million for the same period in 2017.

This was on 4.1% higher revenue of RM328 million, compared with RM315.2 million for the same period in 2017.

Revenue Group to enter Myanmar by first quarter next year

KUALA LUMPUR: Cashless payment solutions provider Revenue Group Bhd plans to make its maiden foray into the overseas market within the first quarter of next year, via its partnership with a multinational company in Myanmar.

“Right now we are waiting for feedback from the authority. We expect to get their approval in first quarter of 2019,” the group’s managing director and group CEO Eddie Ng Chee Siong told reporters after its AGM and EGM today.

“If there is any good opportunity in other Asean countries such as Thailand and Indonesia, we will also consider (venturing into these countries),” Ng added.

Previously, the group said it allocated RM1.5 million from its initial public offering (IPO) proceeds for expansion into Myanmar and Cambodia, citing early stage development in the e-payment systems there.

In total, the ACE Market-listed company raised RM20.6 million from its IPO exercise, in which the bulk of the proceeds will be used to buy 9,000 units of new electronic data capture (EDC) terminals with the capability of accepting Quick Response payment.

However, Ng noted that there is no new development on its expansion plans into Cambodia at the moment.

He said the group’s businesses are concentrated in Malaysia and a majority of the group’s revenue is derived locally.

On its financial performance for financial year ended June 30, 2019 (FY19), Ng said the group is optimistic on its outlook as it aims to execute all of its existing contracts and expects more merchants to embrace cashless payment going forward.

Additionally, he said the group’s recent partnership with Public Bank Bhd to launch an all-in-one digital payment terminal is expected to be one of the main drivers to the group’s double-digit revenue growth target for FY19.

“Currently, we are also working with Hong Leong Bank on a similar contract we concluded with Public Bank. Hopefully, we can roll out the machines by end of this year.

“Because the more terminals we deploy, the more transactions it will gain and the more recurring income (we will get) from the banks’ site,” Ng added, noting it has sold 5,000 units of EDC terminals to Hong Leong Bank previously.

The group’s revenue grew 33% to RM35.36 million in FY18, compared with RM26.5 million in FY17 mainly due to higher revenue recognised from its three core business segments.

Its three business segments include the distribution, deployment, and maintenance of EDC terminals, electronic transaction processing services for credit and debit cards as well as solutions and services related to payment infrastructure.

The group serves more than 10 financial institutions. Its clients include physical and online store merchants.

Murphy Oil in talks to sell Malaysian oil and gas assets, say sources

SINGAPORE, Nov 29 — Murphy Oil Corporation is in talks to sell its Malaysian oil and gas assets after an unsolicited bid that could fetch between Us$2 billion and US$3 billion (RM8.38-12.57 billion), people familiar with the matter said, in the…

Murphy Oil said to be in talks to sell Malaysian oil & gas assets

SINGAPORE: Murphy Oil Corporation is in talks to sell its Malaysian oil and gas assets after an unsolicited bid that could fetch between US$2 billion to US$3 billion (RM8.4 billion to RM12.6 billion), people familiar with the matter said, in the latest energy merger and acquisition deal in the Southeast Asian nation.

The independent US oil and gas exploration and production company has tapped banks for the potential sale of its majority interests in eight separate offshore production sharing contracts in Malaysia, said the people, who declined to be identified because the matter is confidential.

“Murphy wasn’t considering a sale but was approached by a party that put forward a very compelling bid. They are in negotiations,” said one of the people.

Murphy, which has been in Malaysia since 1999, could agree on a deal in a couple of weeks, the person said. Others familiar with the matter suggested Spanish oil major Repsol, whose presence in Malaysia is focused on its upstream business, or other global majors could be potential buyers for Murphy’s assets.

The possible transaction comes as M&A activity is heating up in Malaysia’s oil and gas sector, where international companies pursuing expansion plans are spotting opportunities.

Repsol and Murphy declined to comment on any potential transaction or talks. There was no response to a query sent by Reuters to Malaysian state-owned Petroliam Nasional Bhd (Petronas), which partners Murphy in Malaysia.

“This is a good, balanced portfolio and offers a smart way for someone looking to grow quickly in the region. Otherwise, it’ll take a decade to start from scratch,” said Alex Siow, upstream oil and gas analyst at energy research firm Wood Mackenzie.

“The buyer will be buying into an operatorship position with Murphy’s stake, therefore having the know-how and will to be an operator is important,” he said.

Murphy produced nearly 46,700 barrels of oil equivalent a day in the quarter ended Sept 30 in Malaysia, the company said in response to a query from Reuters.

The best of Sarawak’s entrepreneurs

KUCHING: The state once again honours the best it has to offer via the Sarawak State Entrepreneur of the Year Awards (EOYS) 2018 and Sarawak State Outstanding Entrepreneurship Award 2018 presented at the Sarawak Chamber of Commerce & Industry’s (SCCI) 67th Annual Dinner on Friday at the Imperial Hotel, Kuching. Organised by the Ministry of […]

MARC affirms Sunway’s ratings but revises outlook to stable from positive

MARC affirms Sunway’s ratings but revises outlook to stable from positive

PETALING JAYA: MARC has affirmed its ratings on Sunway Bhd’s RM2.0 billion bond and RM2 billion sukuk programmes but revised its outlook to stable from positive to reflect increasing headwinds the Sunway group faces in the property and construction sectors, given the subdued performance of the domestic property market and downward revision in government-related infrastructure contracts.

Sunway Group’s increased borrowing levels have also added to the rating agency’s concerns.

The affirmation is premised on Sunway Group’s expected total debt level of RM10 billion to RM11 billion in the next two years.

Meanwhile, the affirmed ratings are underpinned by Sunway Group’s well-established businesses in property development, property investment, construction, healthcare and leisure-related operations that provide diversified sources of revenue and earnings. Its strong market position in the property and construction sectors would enable the group to weather challenges in these sectors. The group also retains sizeable cash generating ability and a moderate financial structure.

These factors notwithstanding, MARC expects the group to adhere to tighter financial discipline, particularly on using debt to strengthen its market position or undertake opportunistic transactions. Sunway Group has since established sizeable programmes under which the group can substantially increase its borrowings. In this regard, the rating agency understands that group borrowings are expected to increase to RM11 billion by end-2020 (1H2018: RM9.0 billion) to fund its working capital requirement and capex.

Its gross and net debt-to-equity (DE) stood at about 1.04x and 0.44x at end-1H2018 with net DE expected to increase to 0.48x by end-2018. However, any further rise in borrowings without concomitant measures to address debt metrics weakness could lead to downward rating pressure.

For 1H2018, the property development division’s revenue and profit before tax (PBT) declined by 46.3% y-o-y and 32.0% y-o-y to RM221.0 million and RM70.2 million, reflecting the continued weak sentiment in the sector. However, for 2H2018, the property division is expected to improve its performance; as at August 2018, property sales of RM1.27 billion have already surpassed the full year sales for FY2017 by 9.7%. Its unsold inventory remained at a moderate level, consisting of high-end properties.

Sunway Group’s construction order book stood lower at RM5.8 billion as at end-August 2018 (October 2017: RM6.7 billion), though it is still sizeable. Despite the tough operating environment for contractors, operating profit margins for its construction division have remained relatively stable at around 10.0%. While PBT rose 3.5% y-o-y to RM89.7 million in 1H2018, the ongoing slowdown in the construction sector may weigh on the division’s performance over the medium term.

The group’s other business segments are likely to continue to cushion the impact from the slowdown. Sunway Group aims to add five more hospitals to its portfolio by 2023. While MARC recognises that diversification provides stability to Sunway Group’s cash flow, the timing of the group’s potentially 70% debt-funded expansion into the healthcare segment could contribute to a weakening in Sunway’s credit metrics. Due to gestation period, these expansion plans are expected to result in continued negative free cash flow for the group.

Cash flow from operations (CFO) has remained healthy, generating an average of RM519.5 million between 2014 and 2017; for 1H2018, CFO stood at RM225.0 million. Nonetheless, given the increased level of borrowings, CFO interest cover has continued to decline to 1.7x and is expected to fall to about 1.5x by end-2020 if borrowing levels increase to RM11 billion. MARC also notes that a mismatch in funding in 2017 and 1H2018 poses some short-term liquidity risks to the group.

Toys 'R' Us Asia to open more stores in region after separation from US owner

SINGAPORE, Nov 20 — Despite the shutdown of Toys 'R' Us stores in the United States, its Asia chain is looking to expand the iconic brand’s presence here and in the region. This is after the toy retailer announced its separation from its…