Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Tuesday, 30 April 2013 19:52
Tuesday, April 30, 2013
KUALA LUMUR (April 30): Based on news flow and corporate announcements today, some stocks that may attract interest on Thursday (May 2) include HL Industries, Nestle, TM, Axiata, SOP and I-BHD [].
With the general election coming closer, KLCI index-linked stocks and government-linked listed companies may also come under scrutiny.
HONG LEONG INDUSTRIES BHD [], a member of the Hong Leong group, reported a 33.6% increase in net profit to RM44.89 million for its third quarter to end-Feb 28, 2013 (3QFY13), from RM33.60 million posted in 3QFY12.
But revenue was lower at RM 553.42 million in the current quarter, compared with RM559.42 million in the corresponding quarter of the preceding year.
Basic earnings per share rose to 14.56 sen, compared to 10.90 sen previously.
In an explanatory note, the group attributed the increase in profits to favourable US dollar payables as a result of the strengthening of the ringgit.
Additional contribution to its profitability came from higher profits recorded by its associated companies, coupled with better operating margins.
Looking forward, the group said that it is expecting satisfactory performances from its consumer products and industrial products segments.
In light of the positive results, the company has declared a second interim dividend of 16 sen per share. The ex-date for the dividend is on 15 May.
Nestle Malaysia Bhd announced that its net profit for first quarter to end-March 2013 was RM184.42 million – a 16.6% higher than RM158.08 million posted in the first quarter of previous financial year. Earnings per share stood at 78.64 sen, up from 67.41 sen.
Its revenue was also up at RM1.23 billion, from RM1.16 billion.
Reviewing its results, Nestle said that several of the product categories recorded a strong double digit growth in Malaysia. These included confectionery, liquid drinks, coffee and chilled dairy.
Stronger demand from export markets has shown some improvement in the first quarter of 2013, with growth coming from ASEAN and Oceania, it said.
“With regard to the profit evolution, higher profit for the quarter was mainly due to lower operating expenses in the first quarter,” Nestle stated.
But Nestle expects 2013 to be “another challenging year” as the global economy still faces many uncertainties.
TELEKOM MALAYSIA BHD [] (TM) has joined a consortium of six global telecommunication companies to establish a submarine cable system to facilitate global Internet connection.
TM said it has signed an agreement with Vodafone Group, UAE Etisalat, Sri Lanka’s Dialog Axiata (a unit of Axiata Group Bhd), India’s Reliance Jio Infocomm Ltd and Omantel of Oman to set up the‘Bay of Bengal Gateway’ (BBG)
The CONSTRUCTION [] of the approximately 8,000 km BBG is intended to link South East Asia, South Asia and the Middle East with Europe and Africa. The cable system is expected to carry commercial traffic by end of 2014.
"With a total distance spanning approximately 8,000 km, BBG is set to provide an alternative route to Europe for TM’s IP traffic.
"This diversity is essential especially in the earthquake prone zones in the Pacific Ocean region and will also complement the other cable systems which TM are latched on to," TM said.
Sarawak Oil Palm Bhd (SOP) saw its first financial quarter net profit almost halved despite a huge jump in revenue.
The PLANTATION [] group reported a net profit of RM21.96 million for the quarter to end-March 2013, versus RM42.99 million in the previous corresponding quarter. Earnings per share fell to 4.83 sen from 9.13 sen.
But its revenue for the quarter jumped 86.7% to RM427.06 million, from RM228.78 million.
In its explanation, SOP said the significant revenue increase was mainly attributed to commencement of refinery activities since third quarter 2012.
It added its profit fall was due principally to the softening average crude palm oil and palm kernel realized price. In addition, the losses from subsidiaries having young mature area have contributed to the lower profit.
On prospects, SOP said: “Given the uncertainties of current global economic climate and high CPO stockpile in hand, … the group would continue to operate within narrow margin. Performance for the year 2013 shall be consistent with the other plantation companies.”
I-Bhd aims to achieve profit before tax of RM65 million in financial year to end-2013 from RM1.8 million a year earlier, driven mainly by property sales.
Its CEO Datuk Eu Hong Chew told reporters today that I-Bhd's property sales will be driven by its RM300 million i-Sovo project besides the launch of its residential incubator and Grand i-Residence developments.
"We expect to launch these projects this year with a total gross development value (GDV) of RM700 million," he told reporters after the company's AGM today.
One of the residential incubator project comprising SOHO units with a GDV of RM331 million is expected to be launched in the next few months.
Apart from property development, Eu said I-Bhd's leisure division is expected to contribute RM50 million or 30% of total projected revenue this year.