Stocks To Watch Sime, MRCB, MMC, Masteel, RHB Cap, Boustead, IGB, KKB, AFG, SOP

Business & Markets 2013
Written by Ho Wah Foon of   
Friday, 29 November 2013 20:30

KUALA LUMPUR (Nov 29): Based on corporate results and news flow today, Sime Darby and MRCB could lead other news-driven stocks in luring investor attention on Monday (Dec 2).

Sime Darby Bhd said today it is cutting down its capital expenditure (capex) by RM2 billion to RM4 billion for its current financial year ending June 30, 2014, after posting weaker results in its first quarter.

It is also lowering its KPI targets for the current year.

Its president and chief executive officer Tan Sri Mohd Bakke Salleh told a press that the current company performance and the external business environment are main factors in the reduction of the capex.

Due to bleak outlook, Sime Darby has cut its headline key performance indicators for the 2013/2014 financial year target to RM2.8 billion net profit and 10% return on average shareholder funds, which were lower than the RM3.2 billion and 12% respectively for the 2012/2013 financial year.

Sime Darby Bhd had earlier announced that its net profit for its first quarter to September 2013 had plunged 50.6% to RM488.99 million, from RM990.25 million in similar quarter the previous year.

Revenue for the first quarter was reduced by 8.4% to RM10.76 billion, from RM11.74 billion in the corresponding period of the previous year.

Profit of the group declined largely due to the lower earnings from all business segments, it said.

Malaysian Resources Corporation Bhd (MRCB) incurred a huge loss of RM122.4 million for the third quarter to September 2013, compared to a net profit of RM35.8 million in similar quarter a year ago.

Revenue generated was RM159.7 million against RMRM299.8 million.

MRCB said it does not expect to meet the group’s KPI and to report profit for the 2013 financial year.

Explaining its third quarter loss, MRCB said in its filing with Bursa Malaysia: “The loss for the current financial quarter was mainly due to the recognition of higher construction costs for certain Kuala Lumpur Sentral development and construction projects without recognition of the same for potential variation orders claims to its clients.”

For the nine months to September 2013, MRCB incurred total loss of RM111.3 million versus a net profit of RM63.1 million in the first nine months of last year. Revenue totalled RM607.5 million versus RM969.9 million.

MMC Corporation Bhd (MMC) saw a 122% year-on-year increase in net profit to RM135.0 million for its third quarter to September, from RM60.9 million in the previous year quarter.

But revenue for the quarter fell to RM1.729 billion from RM1.908 billion in the previous corresponding quarter.

For the nine months to September, net profit recorded was RM187.7 million, a significant decline from RM842.3 million in the year before. Revenue was also lower at RM4.968 billion as compared to RM6.582 billion in the previous corresponding period.

“The decrease in the group’s revenue is mainly due to the deconsolidation of Gas Malaysia Bhd’s results post listing in June 2012, coupled with lower contribution from Malakoff,” said MMC.

Malaysia Steel Works (KL) Bhd said its net profit for the third quarter ended 30 September 2013 (3Q13) rose 37.9% to RM9.7 million from RM7.0 million in previous year’s third quarter.

Revenue for 3Q13 rose 12.2% to RM351.2 million from RM312.9 million previously on higher sales.

“The quicker profit growth was mainly attributable to continued improvement in operating efficiency at the group’s Klang Valley-based meltshop and rolling mill,” the company said.

Masteel’s managing director and chief executive officer Datuk Seri Tai Hean Leng expressed confidence in the group’s performance for the rest of the year.

RHB Capital Bhd reported a 15% growth in third quarter net profit from a year earlier. Bottom line had risen on higher interest and Islamic banking income.

Fee-based income growth besides higher foreign exchange gains had also contributed to profit growth.

RHB said net profit rose to RM559.15 million in the third quarter ended September 30, 2013 (3QFY13) from RM487.48 million. Revenue increased to RM2.45 billion from RM1.96 billion.

Nine-month (9MFY13) net profit however fell to RM1.33 billion from RM1.38 billion a year earlier. Revenue was higher at RM7.06 billion versus RM5.8 billion.

Boustead Holdings Bhd reported a 25% increase in third quarter net profit from a year earlier but nine-month bottom line fell 3%. The decline was due mainly to lower income from its oil palm plantations.

Boustead said net profit rose to RM97.5 million in the third quarter ended September 30, 2013 (3QFY13) from RM79.5 million. Revenue climbed to RM2.7 billion from RM2.51 billion.

Boustead plans to pay a dividend of 7.5 sen a share for 3QFY13.

Nine-month (9MFY13) net profit fell to RM258.6 million from RM266.2 million. Revenue was however higher at RM7.62 billion compared to RM7.37 billion.

IGB Corp Bhd's net profit rose 52% to RM57.16 million in the third quarter ended September 30, 2013 from RM37.5 million a year earlier. Profit growth came from property development and investments.

IGB said higher revenue, besides lower administrative and operating expenses, had also contributed to profit growth. The firm said revenue climbed toRM281.83 million from RM241.19 million.

Nine-month net profit rose to RM166.25 million from RM150.92 million a year earlier. Revenue was higher at RM776.67 million versus RM724.91 million.

IGB plans to pay an interim dividend of five sen a share for the quarter in review.

The firm is optimistic of its outlook. "The board is confident that the group’s operational results for the current financial year should show an improvement over the previous financial year," IGB said.

KKB Engineering Bhd's (KKB) unit, Harum Bidang Sdn Bhd, has been awarded a contract for the Additional Supply Order of Mild Steel Pipes and Pipe Specials by CMS Infra Trading Sdn Bhd, at an estimated contract sum of RM227 million.

The company said the supply order, expected to be completed in May 2015, is for the proposed construction and completion of the Tanjung Manis Water Supply Project (Phase 1) in Sarawak.

KKB said the supply order is expected to contribute positively to the earnings and net assets of KKB group, for the financial years ending Dec 2013 to 2015.

Alliance Financial Group Berhad (AFG), comprising Alliance Bank Malaysia and its subsidiaries, announced that for the six months ended 30 September 2013 (1H FY2014”), it reported a net profit after tax of RM269.0 million, compared to RM266.5 million in the corresponding period ended 30 September 2012.

It said it recorded a return on equity of 13.3% and earnings per share of 17.7 sen for the first half of FY2014.

"The improved financial performance in the first half of FY2014 compared to the corresponding period of FY2013 was mainly attributed to the growth in interest income and recurring non-interest income," AFG said.

Sarawak Oil Palms Berhad's net profit for the third quarter financial year ended 30 September 2013 fell 10% to RM38 million from RM42 million.

Revenue for the quarter rose 12.1% to RM471 million from RM420 million compared to a similar financial quarter a year ago.

Profits for the nine months under review fell to RM60 million from RM134 million a year ago. Cumulative revenue rose to RM1.212 billion from RM931 million from a year ago.