KUALA LUMPUR (Sept 21): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Tuesday, Sept 22) could include the following: BLand, Enra Group, FGV, AFG, XiDeLang, Tecnic and CME.
Berjaya Land Bhd’s (BLand) net profit for the first financial quarter ended July 31, 2015 (1QFY16) shrank 73.7% to RM9.91 million or 0.2 sen per share due to lower profit contribution from its gaming business Sports Toto Malaysia Sdn Bhd (STMSB) on higher prize payouts on top of its absorption of the goods and services (GST) expense.
A year ago, the group recorded a net profit of RM37.66 million, or 0.76 sen per share.
BLand also faced lower profit contribution and higher finance costs from its hotels and resorts businesses during 1QFY16.
But its revenue rose 7.1% to RM1.51 billion from RM1.41 billion in 1QFY15, thanks to its subsidiary H.R. Owen Plc’s additional outlets and higher new car sales volume coupled with favourable foreign exchange effects from the group’s foreign businesses.
The group also attributed the better revenue to the higher progress billings by its property development and investment business.
BLand expects the gaming business to be challenging moving forward, due to the cautious domestic consumer spending, weakening ringgit and GST absorption by STMSB.
Enra Group Bhd inked a heads of agreement (HoA) to set up a special purpose vehicle (SPV) with AWT International (Asia) Sdn Bhd to collaborate on oil and gas (O&G) projects.
The property investment company said the SPV will collaborate on projects involving wells, platforms and field abandonment or decommissioning projects with direct or indirect subsidiaries of Petroliam Nasional Bhd (Petronas) as well as other O&G operators.
Enra will contribute to the SPV resources, qualification, abilities and other capabilities as well as its business network, contacts or relationships, particularly access to information or otherwise.
Meanwhile, AWT International will provide operational and technical experience in abandonment and decommissioning projects for the O&G industries in Southeast Asia.
Both parties have proposed to enter into a shareholder agreement by end of November to formally set out the detailed terms of the proposed joint effort.
Felda Global Ventures Holdings Bhd (FGV) dropped out from the Dow Jones Islamic Market Malaysia Titans 25 Index list of stocks in the benchmark index’s quarterly review.
Earlier this year, FGV was also dropped from the FBM KLCI 30 component stocks.
FGV’s net profit for the second quarter ended June 30, 2015 contracted about 70% to RM46.09 million from RM151.86 million a year ago. However, revenue gained 8.1% to RM4.19 billion from RM3.87 billion previously.
Alliance Financial Group Bhd (AFG) has proposed to raise RM4 billion via bonds to finance working capital needs and existing debt redemption.
The RM4 billion exercise will comprise RM1.5 billion medium-term notes (MTN) programme, RM2 billion MTN scheme and RM500 million commercial paper exercise.
The MTN programmes will have a 30-year duration, while the commercial paper exercise will be valid for seven years.
In an announcement on Bursa Malaysia today, the banking group said it is undertaking the three-tranche bond issue through its wholly-owned Alliance Bank Malaysia Bhd.
XiDeLang Holdings Ltd will add another two production lines by year end, giving the group an additional capacity of 1.5 million pairs of shoes.
The group currently has six production lines with a total capacity of 6 million pairs of shoes, said XiDeLang managing director and chief executive officer Ding Peng Peng during an extraordinary general meeting today.
The group recorded a lower net profit of RM491,000 for the second quarter ended June 30, 2015, from RM14.85 million a year ago. Ding attributed the lower profit to higher expenditure in promotion and advertisement.
Nevertheless, he said the performance should not be merely based on profits but also on the group’s structure and expansion plans.
He added that the group will continue to look out for merger and acquisition opportunities to ensure that it continues to grow.
XiDeLang is currently in the process of acquiring Jinjang YangSen Garment Co Ltd, a Quanzhou-based company which designs, manufactures, distributes and markets apparels on original design manufacturer basis for brands like Primark, Mizuno, Joma, NewYorker and Admiral.
Tecnic Group Bhd has proposed a reverse takeover (RTO) on RohasEuco Holdings Sdn Bhd (REI), a telecommunication network services provider, as part of its regularisation plan to maintain its listing status on the Main Market of Bursa Malaysia.
In a filing with Bursa Malaysia today, Tecnic said it has entered into a non-binding memorandum of understanding (MoU) with REI for the proposed RTO.
The RTO entails Tecnic acquiring all the equity interests held by the vendor in REI, comprising 68.38 million shares, for RM200 million.
The purchase consideration will be satisfied via the issuance of 317.46 million shares at 63 sen apiece.
CME Group Bhd has terminated, effective today, its joint-venture agreement (JVA) with Ruark No 11 Pty Ltd ATF the Oasis Unit Trust (Ruark) and Central Park (Qld) Pty Ltd (Central Park) to develop a mixed project on two parcels of contiguous land in Mandurah, Australia, which carries an estimated gross development value of AU$112 million (approximately RM342 million).
The termination is expected to have “an immediate impact on the earnings and earnings per share (EPS) of the group for the financial year ending Dec 31, 2015”, said CME, which manufactures and sells firefighting equipment, in its filing to Bursa Malaysia today.
It may also have an impact on its net assets for FY15 “as the properties are subject to a mortgage [after] securing the development loan. The board will pursue legal action (if necessary) to safeguard the assets of CME,” it noted.
However, it assured that the potential future earnings contribution from the project — as CME shall continue the development alone or with a new potential JV party — may enhance the earnings and EPS of the group.
The termination, it explained, is on the basis of Ruark’s continuing non-compliance with the JVA.
“Having considered the terms of the JVA and after taking advice from legal counsel and a project management expert appointed by CME in Western Australia, the board is of the view that Ruark has committed ongoing breaches of the JVA, which [have] remained unrectified for more than 30 days, entitling CME to terminate the JVA,” it said.
CME said it has, via its solicitors, served the termination notice on Ruark and Central Park. Ruark, it said, has also purported to terminate the JVA, effective on the same day.
“CME will take consequential action to ensure that Ruark and Central Park will no longer be entitled to participate on the Management Committee for the Project, and the carriage of the Development shall be vested solely in CME,” it added.
(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)