Business & Markets 2013
Written by Ho Wah Foon of theedgemalaysia.com
Friday, 10 May 2013 20:37
KUALA LUMPUR (May 10): Based on news flow and corporate announcements today, stocks that may attract investor interest include MMC, PLANTATION []s stocks, Petronas Gas, Faber, SapuraKencana, OSK Property and Minetech
MMC CORPORATION BHD [] announced that its subsidiary, Malakoff Corporation Bhd (MCB), has decided to defer its listing in view of two developments:
(i) The Tanjung Bin power plant will be undergoing major maintenance works expected to be substantially completed by the second half of 2013; and
(ii) There is potential positive outcome of certain growth opportunities currently being pursued by MCB which may, among others, increase the effective power generation capacity of MCB.
Due to these developments, MCB expects its listing to be completed no later than the first half of 2014, instead of the second quarter of 2013 as planned earlier.
MCB has six months from 7 March 2013, the date of the approval from the Securities Commission to implement the exercise.
Plantations stocks may react to the news that local palm oil inventory had fallen 11.35% to 1.93 million tonnes in April this year from RM2.17 million tonnes in March. The fall was sharper than industry expectations.
According to the Malaysian Palm Oil Board (MPOB), crude palm oil (CPO) production for April, however, rose 3.12% to 1.37 million tonnes.
Palm oil exports in April declined 5.62% to 1.45 million tonnes from 1.54 million tonnes in March.
Palm oil prices had risen in response to the data today. In the futures market, spot month May 2013 gained RM2 to RM2,290 a tonne, June 2013 added RM25 to RM2,305, July 2013 increased RM32 to RM2,319 and August 2013 gained RM30 to RM2,316.
PETRONAS GAS BHD [] said its revenue for the quarter ended 31 March 2013 was RM910.4 million, a 0.5% decrease compared to the corresponding quarter in 2012 due mainly to lower contribution from gas processing.
Despite lower revenue, net profit for the quarter increased by RM26.9 million to RM360.43 million. Earnings per share climbed to 18.22 sen from 16.85 sen.
“This was primarily contributed by decrease in depreciation expense as a result of review of property, plant and equipment major components and useful lives undertaken by the group last year,” the company said.
On outlook, the company said the group’s earnings will remain stable on the back of the fixed fee structure under the Gas Processing and Transmission Agreement.
It sees additional earnings potential from performance based structure which is dependent on the level of production of by-products and their prices.
FABER GROUP BHD [] reported a 30% fall in first quarter net profit from a year earlier on lower revenue and higher wages.
The hospital support services (HSS) provider said net profit came to RM11.53 million in the quarter ended March 31, 2013 (1QFY13) compared to RM16.49 million previously.
The company, which also develops PROPERTIES [], saw revenue fall 6% to RM173 million from RM184 million.
Looking ahead, Faber expects its domestic HSS concession earnings to be lower due to new concessions for Sabah and Sarawak, where the firm will own a minority interest of 40% in the joint ventures.
"In addition, the contribution from property division is also expected to be lower, as most of the current projects are at the tail end of completion," Faber said.
SapuraKENCANA PETROLEUM BHD []'s wholly-owned unit, TL GeoSciences Sdn Bhd, has won a RM60 million contract from Petronas Carigali Sdn Bhd (PCSB) for the provision of marine geohazards investigation services.
SapuraKencana said the contract covered PCSB's offshore oil and gas fields in Peninsular Malaysia, according to a report from Bernama.
"The contract, effective April 12, 2013, is for three years. It is expected to contribute positively to the earnings and net assets per share of the group for the financial years ending Jan 31, 2014 to Jan 31, 2016," it said.
OSK PROPERTY HOLDINGS BHD [] said it posted a 47.4% fall in net profit for the first quarter despite higher revenue.
For the quarter ended March 2013, it made a net profit of RM6.34 million compared to RM12.05 million in the previous corresponding period. Earnings per share also fell to 2.64 sen from 6.43 sen.
But revenue increased to RM56.89 million, from RM51.04 million. And net asset value per share climbed slightly to RM1.56 from RM1.54.
Reviewing the results, OSK Property said the decrease in profit was mainly due to lower profit contributions from the Sutera Damansara, Bandar Puteri Jaya projects as new phases along with new projects launched have yet to achieve advanced stages of CONSTRUCTION [].
In addition, the recognition of losses arising from the proposed development of affordable homes and higher
marketing and promotional expenses dragged down its bottomline.
Looking ahead, the company said its products continue to receive good response. Its recently launched projects are nearly fully sold, it added.
MINETECH RESOURCES BHD [] plans to place out up to 30.22 million new shares in the quarry operator to investors. The exercise is expected to raise at least RM6 million.
The company said the placement shares, accounting for up to 10% of its issued share, will be priced at a minimum of 20 sen each.
The firm said it plans to use the proceeds to "finance the leasing, development, operation and maintenance of potential new quarry sites".
The exercise is due for completion within six months after the regulator's consent is obtained.