Stocks To Watch SapuaraKencana, water stocks, plantation firms, BAuto, Hektar Reit

Business & Markets 2013
Written by Ho Wah Foon of  
Friday, 06 December 2013 20:34

KUALA LUMPUR (Dec 6): SapuaraKencana Petroleum Bhd may be the focus of Monday’s market after reporting a stronger set of results for the third quarter and announcing a top management change.

The other companies that could attract interest on Dec 9 include water-related stocks such as Puncak Niaga and  Gamuda as the Mentri Besar of Selangor is expected to announce a new offer for the takeover of water assets held by these two companies on Monday.

Plantation stocks, Berjaya Auto and Hektar Reit are also likely to be stocks to watch out for.

SapuaraKencana Petroleum Bhd said its net profit for third financial quarter to October 2013 rose 34.5% year-on-year to RM245.6 million.

Revenue for the quarter also rose to RM2.38 billion, from RM2.22 billion a year ago.

For the nine months to October, total profits jumped to RM749.7 million, up from RM400.7 million in the corresponding period in previous financial year. Revenue also rose sharply to RM6.49 billion from RM4.95 billion.

In its explanatory notes, the oil and gas player said profits had risen in tandem with increase in revenue.

For the third quarter, revenue rose RM166 million or 7.5% compared to a year ago mainly due to the inclusion of financial results from tender rig business after the completion of an acquisition in April 2013. And profit rose in line with revenue increase.

Similar reason was stated for the nine-month results.

In a separate announcement, the company said Datuk Mokhzani Mahathir and Yeow Kheng Chew have decided to relinquish their management roles in SapuaraKencana Petroleum Bhd.

SapuaraKencana said prior to the merger between SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd, it was decided that the leaders of the merging entities would jointly refine the strategy and spearhead integration of the companies.

Before the merger, Kencana was headed and controlled by Mokhzani while SapuraCrest was controlled and helmed by Tan Sri Shahril Shamsuddin.

“With that integration now successfully completed, what remains is the execution of the strategy that was set by the two leaders.

“Execution of this strategy involves the streamlining of our company’s management. Thus, Datuk Mokhzani Mahathir and Mr Yeow Kheng Chew have decided to relinquish their management roles in the company.”

But the statement said Mokhzani and Yeow will continue to actively support the company as non-executive non-independent directors, and Shahril will remain as president and group chief executive officer.

“This development is consistent with the strategy set by the leaders pre-merger, and is not in any way a response to any conflict of interest queries raised in the past,” said company chairman Datuk Hamzah Bakar.

Plantation stocks are likely to come under scrutiny on news that palm oil imports by India, the world’s biggest buyer, may climb as amid a delay in the domestic oilseed harvest.

Shipments of the main crude and refined oils jumped 15 percent to 700,000 metric tons in November from a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg.

Rising Indian demand may trim stockpiles in Indonesia and Malaysia, and help extend the first annual increase in futures in Kuala Lumpur in three years.

Palm prices are set to extend a bull market rally as output drops in Indonesia and biofuel mandates expand globally, according to Dorab Mistry, director at Godrej International Ltd.
Following this piece of news from Bloomberg, crude palm oil futures rose across the board on Bursa Malaysia. February futures rose RM26 to RM2667 per tonne in afternoon trades.

Berjaya Auto Bhd (BAuto)’s net profit soared 251% for its second quarter ended 31 October 2013 to RM27.6 million from RM7.9 million in the previous corresponding quarter.

Revenue for the quarter under review also rose to RM282.4 million from RM217.3 million in the previous year’s similar quarter.

The group announced a dividend payment of 1.75 sen per share payable on 16 January 2014.

“The higher revenue was mainly due to good demand for Mazda CX-5 and Mazda6 models in Malaysia and sales contribution from Berjaya Auto Philippines Inc. (BAP) which began operations in January 2013,” said the group in its statement.

The group attributed the higher profit for the quarter to favourable sales mix, improvement in profit margin, consolidation of BAP’s results and a share of profit in Mazda Malaysia.

Cumulatively, net profit for the six months to Oct 2013 was sharply higher at RM53.7 million, compared to RM21.1 million in the previous corresponding period. Revenue also increased to RM710.9 million from RM431.5 million last year.

“The board is of the view that the performance of the group for the remaining quarters will be satisfactory with the group’s plans to launch a few models going forward,” said BAuto on its prospects.

Hektar REIT has gained RM14.4 million after it carried out a revaluation exercise of Subang Parade, Mahkota Parade, Wetex Parade, Central Square and Landmark Central.

The REIT said the total revaluation of the said properties represented a surplus of 1.4% over the unaudited net book value of RM1.033 billion as at Sept 30, 2013 (before revaluation).

“The net asset value per unit was increased to RM1.5285 from RM1.4926 upon incorporation of the revaluation surplus of RM14.4 million or equivalent to 3.59 sen per unit,” said Hektar REIT.

It said the revaluation was conducted to determine the current market values of the properties for accounting purposes.

Hektar REIT said it will undertake an annual revaluation of all investment properties under its portfolio.