financial year


Westports expects growth to return in second half

KUALA LUMPUR: Westports Holdings Bhd expects growth to return in the second half of the year after the normalisation of the realignment in alliances.

“On the outlook, we expect slight modest growth this year. There will be a slight decline in the first quarter, second quarter will be flat and then it will start growing strongly in the third and fourth quarters,” said its group managing director Datuk Ruben Emir Gnanalingam.

Speaking to reporters at its AGM today, he said the impact from the realignment of shipping alliances, which happened in April last year, would last for about 15 months after which there would likely be growth.

However, despite the projected improvement in the second half of the year, the group does not expect to achieve another record year this year.

Westports handled nine million twenty foot equivalent units (TEUs) in financial year ended Dec 31, 2017 and reported its highest revenue ever of RM2.1 billion. Its net profit also hit a record of RM652 million.

Shareholders positive after Lotte’s bumpy start

KUALA LUMPUR: Lotte Chemical Titan Holdings Bhd shareholders remain buoyant on the prospects of the petrochemical firm after a series of unfortunate events – share price slump, stop-work order and fire at its plant – in the first six months of listing marred the fanfare of being one of the largest listings the stock exchange has seen in the last five years.

Shareholders met by SunBiz at the group’s AGM today said they are more relieved now after all the distractions, as the business operations are back on the right track.

They acknowledged that while the share price movement is something beyond the group’s control, its rebound to above RM6 is seen as a good sign for the group which hit a low of RM4.14 just a month into its listing at RM6.50.

“I managed a handsome paper gain after I bought into the stock when it fell to below RM5 last year,” a minority shareholder said.

At today’s market close, the stock gained 2 sen or 0.3% to RM6.23, just 4.2% shy from its initial public offering (IPO) price which was slashed from the RM8 set initially, due to weak market sentiment.

Its share price dipped to a low of RM4.14 last August after announcing a 72% plunge in second-quarter net earnings ended June 30, 2017 on the back of high inventory cost carried forward from turnaround activities as well as higher production cost due to water supply interruption.

Giving truth to the adage of trouble coming in threes, in September, Lotte’s Pasir Gudang factory caught fire due to contact between residual vapour from the quench water drain pit and the steam line, causing an estimated loss of less than RM50,000.

The same plant was also issued a stop-work order by the Department of Environment in October after being identified as the source of a stench, which reached Singapore’s shores.

Looking ahead, Lotte’s executive vice-president of corporate planning Philip Kong believes the group will continue to see a reasonable profit margin given strong demand for petrochemical products with limited market supply capacity.

This is despite the rising oil prices, which could put pressure on petrochemical players. As at 7pm today, Brent crude oil stood at US$74.95 a barrel.

“Our business is a margin game. As long as there is strong demand with limited supply, the margin will be maintained. If oil prices go up, the polymer prices will pick up as well,” he told reporters after the group’s first AGM since its listing.

Lotte produces olefins and polyolefins, which are raw materials for plastic product manufacturing.

For the financial year ended Dec 31, 2017, its net profit declined 19.1% from RM1.32 billion to RM1.06 billion, due to lower sales volume resulting from two routine statutory turnaround exercise at the Malaysian site and water disruption in Johor.

For 2018, its utilisation rate is expected to increase to 90% from 75% currently in the absence of plant shut down and water disruption.

Speaking on the integrated petrochemical facility in Indonesia, Kong said Lotte will make a final decision on its planned integrated petrochemical facility in Indonesia within the year or early next year. The estimated cost of the project is between US$3 billion (RM11.7 billion) and US$4 billion (RM15.6 billion) and is scheduled to be completed by 2023.

He added that Malaysia and Indonesia, which make up 70% of the overall business, remain the two important markets for Lotte on the back of huge population and a slight premium against the international prices.

Vizione share price falls after profit guarantee news

PETALING JAYA: Vizione Holdings Bhd’s share price fell one a sen this morning after it announced that its newly acquired Wira Syukur (M) Sdn Bhd achieved 34.6% of a two-year profit guarantee, in the first financial year.

At noon, its share price was stood at 13 sen with 8.76 million shares traded.

Yesterday, Vizione told Bursa Malaysia that Wira Syukur achieved 34.6% of the guaranteed profit in the financial year ended Dec 31, 2017.

Last year, Vizione bought into Wira Syukur for RM280 million with a profit guarantee of RM82.59 million for two financial years, just ended Dec 31, 2017 and ending Dec 31, 2018.

KIP REIT looking to diversify into logistics assets


KUALA LUMPUR: KIP Real Estate Investment Trust (REIT) is looking to diversify upstream into logistics or warehouse assets, said KIP REIT Management Sdn Bhd managing director Datuk Chew Lak Seong. However, he stressed that nothing is firm yet. Chew explained that the REIT will be exploring options to increase its revenue stream from other sectors, as well as to diversify risks. “We intend to be still relevant to our business sector — the retail sector — as we understand our sector best and will be more comfortable. We are stillRead More

Stocks in Focus (24-04-2018)

KUALA LUMPUR (April 23): Based on corporate announcements and news flow today, companies in focus tomorrow (April 24) may include the following: GuocoLand (Malaysia) Bhd,…

RAM Ratings reaffirms TNB at AAA/Stable

KUALA LUMPUR, April 23 ― RAM Ratings has reaffirmed the respective AAA/Stable ratings of Tenaga Nasional Bhd’s US$500 million(RM1.95 billion)-equivalent Murabahah MTN Programme (2005/2025) and RM5 billion Islamic MTN Sukuk Wakalah Programme…

Sinotop shares flat on RM164m proposal for construction firm

PETALING JAYA: Sinotop Holdings Bhd share price opened flat despite a potential RM164 million bid to buy a 60% interest in construction company Asianmax Corp Sdn Bhd on Friday.

In the last one year the company has lost 43% of its share value. It closed unchanged in morning trade at 43 sen.

On Friday, Sinotop announced that its proposal for Asianmax was to strengthen its existing project management and infrastructure construction-related businesses.

The company told Bursa Malaysia it may consider a rights issue to fund the deal which would include the use of internally generated funds and/or bank borrowings.

The group which is involved in the production of customised woven loom-state fabrics from cotton, synthetic and mixed yarn, said it had entered into a term sheet with Datuk Justin Soo for the proposed acquisition, which would exclude one of Asianmax’s subsidiary, Johnson Fluid Engineering Sdn Bhd, as it is not involved in the business of construction. The term sheet is subject to a definitive share sale agreement between Sinotop and Soo.

Soo will provide a profit guarantee of an aggregate amount of not less than RM50 million for the financial year ending 2019, 2020 and 2021 collectively.

Subject to a definitive agreement, the purchase consideration will be satisfied either through wholly in cash, wholly by the issuance of new redeemable convertible preference shares (RCPS) in Sinotop based on terms to be mutually agreed upon by the company and the vendors at an issue price of 42 sen per RCPS or a combination of both.

UOB Malaysia’s profit up 4pc to RM1.14b in 2017

KUALA LUMPUR, April 24 — United Overseas Bank (M) Bhd recorded a four per cent increase in profit after tax to RM1.14 billion for the financial year ended Dec 31, 2017. In a statement today, the bank said total operating income…

Digi may return to Shariah-compliant list

KUALA LUMPUR, April 23 — Telecommunications provider Digi is strongly expected to be reinstated to the Securities Commission's Shariah-compliant list by May this year, Kenanga Research said today. The research house said the group has already…

Glomac may miss FY18 sales target

PETALING JAYA: Glomac Bhd is facing another challenging year and may miss its property sales target for financial year ending April 30, 2018 (FY18), said Maybank IB Research.

The research house said that Glomac’s earnings and sales outlook remain challenging with Glo Damansara Mall dragging its earnings and weak property buying sentiment ahead of the 14th General Election.

“Glomac’s earnings outlook remains challenging on weak property sales and losses from Glo Damansara Mall. Currently, Glo Damansara Mall is 54% leased and some of the tenants are granted a rent free period.

“Also, Glomac’s near-term earnings would be dragged by higher tax charges due to non-recognition of deferred tax assets on tax losses and under provision of prior year tax expenses,” it said in its report.

According to Maybank IB Research, Glomac’s property sales may fall short of its internal target of RM400 million to RM420 million for financial year ending April 30, 2018 (FY18) given the challenging property market.

The delays in launching Saujana Jaya, affordable townhouses at Saujana KLIA and Lakeside Residences shop units could also affect Glomac’s property sales for FY18.

“Glomac has locked in RM91 million in property sales in the first nine months of FY18, just 22% of its full-year target. Assuming a 50-60% take up in all the launches in the fourth quarter, we estimate FY18 sales to be around RM363 million, which is 14-24% below our initial/management targets,” it said.

It lowered its FY18 and FY19 earnings forecasts by 57% and 36% respectively to factor in a lower sales forecast of RM363 million and RM538 million for FY18 and FY19 respectively, higher losses from Glo Damansara Mall and a higher tax rate of 55% in FY18 compared with 25% previously.

“Glomac’s major shareholders have been actively buying its shares but we think a privatisation is unlikely. The intention is to stay listed for access to the equity capital market and a better profile, we understand,” it said.

Maybank IB Research maintained its “hold” call on the stock with a lower price target of 57 sen, from 61 sen previously. Glomac’s share price closed unchanged at 50 sen last Friday on 200,000 shares traded.