Business & Markets 2013
Written by Ho Wah Foon of theeedgemalaysia.com
Friday, 30 August 2013 19:43
KUALA LUMPUR (Aug 30): If the current Syrian tension does not escalate into a full-scale war over the weekend, stocks that could lure investor attention may include UMW, Sime Darby, RHB Cap, MMC, CMSB, Axiata, Muhibbah, WTK, Protasco, Kinsteel and Perwaja.
UMW HOLDINGS BHD []’s share price may come under pressure after MARC lowered its long-term Islamic debt ratings on UMW Holdings Bhd’s RM300-million Islamic Commercial Paper/Islamic Medium Term Notes (ICP/IMTN) Programme to AA+ID from AAAID.
After this rating downgrade, MARC said it had to withdraw all ratings on UMW at the latter’s request.
In a statement, MARC said UMW’s recent growth focus on oilfield support operations has raised business risk. Its concentration on the automotive segment and challenges faced in this industry, as well as the debt level of the company, are other factors.
Soon after the MARC statement, UMW released its second quarter results, which may help to mitigate any damaging impact from the rating downgrade.
UMW Holdings Bhd proposed to pay 10 sen per share to shareholders after it announced its second quarter results today.
For the three months to June 30, net profit rose 12% year on year to RM251.0 million while revenue declined 14.8% to RM3.5 billion.
The company said the fall in revenue was due to lower contribution of revenue from the automotive, oil & gas and equipment segments.
The net profit of UMW, however, increased by 12% to RM251.0 million from the RM224.2 million due to the better margins in the oil & gas segment
SIME DARBY BHD [] said it posted a higher net profit of RM1.3 billion for the fourth quarter ended June 30 (4Q FY2012/2013) but a lower pre-tax profit, when compared to the fourth quarter of last financial year.
In releasing its results today, the group proposed a final dividend of 27 sen per share for FY2012/2013.
Sime Darby said year on year, fourth quarter pre-tax profit declined by 14% while net profit rose by 19%.
“The group registered a lower pre-tax profit for 4Q FY2012/2013 due to lower profit contributions from the PLANTATION [], motors and energy & utilities divisions. However, these were mitigated by stronger performances of the property and industrial divisions,”
Sime Darby said.
It explained that the net profit for 4Q FY2012/2013 included a gain of RM340 million on the partial disposal of interest in its healthcare business.
For the fourth quarter, revenue was RM12.9 billion, compared to RM14.0 billion a year ago.
RHB CAPITAL BHD [] reported a second quarter net profit of RM410.3 million, which was 9.6% down from RM453.8 million in the second quarter of last year.
Revenue for the quarter to June 30 was RM2.3 billion, up from RM1.9 billion in previous year second quarter.
For the first half of 2013, the group reported a net profit of RM767.5 million, or 13.7% lower from the previous year corresponding period. Total revenue was RM4.6 billion versus RM3.8 billion.
The major financial group has declared a single tier dividend of 6.0% for the first half of 2013.
RHB Cap said the lower earnings for the first half was due to higher impairment allowance for loans and higher cost base post acquisition of OSK Investment Bank Bhd. The first half also saw higher other-operating expenses.
MMC Corp Bhd's net profit fell 94% to RM43.86 million in the second quarter ended June 30, 2013 (2QFY13) from RM752.2 million a year earlier. Revenue fell to RM1.69 billion from RM2.35 billion.
MMC said profit had fallen on lower revenue from electricity-generation unit Malakoff Corp Bhd. Lower share of income from Gas Malaysia Bhd (GMB) had also curbed MMC's profit.
The significant drop in MMC's 2QFY13 profit was also due to the RM1.01 billion GMB listing gain recorded by MMC a year earlier.
MMC's cumulative 1HFY13 net profit fell to RM52.68 million from RM781.43 million a year earlier. Revenue was lower at RM3.24 billion, versus RM4.67 billion.
Looking ahead, MMC said it expects "operating results for the full year to be comparable to that of last year". This excludes the one-off gain from GMB’s listing.
CAHYA MATA SARAWAK BHD []'s (CMSB) net profit fell 15% to RM40.0 million in the second quarter ended June 30, 2013, from RM47.1 million a year earlier.
CMSB said profit had fallen mainly on losses at its property development unit. Group revenue however rose to RM338.33 million from RM292.2 million.
CMSB' cumulative 1HFY13 net profit fell to RM68.74 million from RM78.44 million a year earlier. Revenue was however higher at RM648.69 million from RM522.54 million.
The company plans to pay a dividend of five sen a share less 25% income tax.
Axiata Group Bhd reported a 3% year on year fall in second quarter net profit as its Indonesian operations registered weaker results.
Axiata said net profit fell to RM644.78 million in the quarter ended June 30, 2013 (2QFY13) from RM666.64 million. Revenue however rose to RM4.63 billion from RM4.42 billion.
"Profit after tax (PAT) in the period decreased by 8.0% to RM707.3 million, mainly from lower profit contribution from operations in Indonesia and higher foreign exchange losses in 2QFY13, off-set by higher profit performance from Malaysia, Bangladesh and Cambodia operations,” the company said.
MUHIBBAH ENGINEERING (M) BHD [] said its net profit rose 22% to RM20.73 million in the second quarter ended June 30, 2013 (2QFY13) from RM17.06 million a year earlier.
The CONSTRUCTION [] firm said its profit growth had come on lower operating cost and minority interest amid revenue decline. The firm said 2QFY13 revenue fell to RM406.6 million from RM625.34 million.
Muhibbah's first-half net profit rose to RM40.53 million from RM33.58 million a year earlier. Revenue however fell to RM792.81 million from RM1.04 billion.
The firm said its construction, shipyard and concession units "achieved better results than first half last year".
However, its crane division had reported weaker results on tax exemption incentive expiry, the company said.
Looking ahead, Muhibbah said oil and gas support services projects are expected to contribute to income.
WTK Holdings Bhd [] posted a net profit of RM11.7 million for the second quarter to June 30, higher than RM8.5 million posted a year ago, due mainly to improved earnings from its timber segment.
For the quarter, revenue was RM184.1 million as compared to RM170.2 million in the 2Q2012, representing an increase of RM13.9 million (8.2%).
WTK said this is due to the better performance for both timber and non-timber divisions. The group’s timber division registered a revenue of RM146.4 million, representing an increase of 12.3% year on year.
PROTASCO BHD [] recorded a net profit of RM14.9 million in the second quarter ended June 30, 2013 (2QFY13). This is 110% above the RM7.1 million in the previous corresponding quarter.
Revenue rose to RM196 million from RM158.4 million previously, Protasco said in a statement.
"The revenue increase was largely contributed by higher revenue from the road maintenance, construction and trading segments. Coupled with improved operating margins, the group’s operating profit and profit after tax registered growth of 10% and 30% respectively compared to the same period in previous year," Protasco said.
Looking ahead, the company said it expects the maintenance segment to continue to be the major contributor to its results.
KINSTEEL BHD [] sank into the red deeper with its second quarter posting a bigger net loss of RM35.4 million, from loss of RM4.3 million in similar quarter a year ago. Revenue also fell sharply to RM416.7 million, from RM669.6 million.
Yesterday, its Islamic debt papers were downgraded by MARC rating agency.
Kinsteel’s listed subsidiary Perwaja Holdings Bhd also posted a net loss of RM71.1 million for the second quarter on vastly reduced revenue of RM361.7 million.