KUALA LUMPUR (Feb 14): Based on corporate announcements and news flow today, companies that may be in focus on Wednesday (Feb 15) could include the following: DiGi, KLK, Sunway REIT, Goodway, Hektar REIT, Dialog, MAHB, Wing Tai, Southern Steel, Bina Darulaman, MISC, Red Sena, Air Asia X, and Hartalega.

DiGi.Com Bhd is establishing two Murabahah sukuk programmes with a combined limit of RM5 billion in nominal value, to raise funds for capital expenditure and working capital.

In a bourse filing today, DiGi said the debt papers will be issued via 15-year Islamic medium term notes (IMTN), which will have up to RM5 billion in nominal value, and seven-year Islamic commercial papers (ICP), with up to RM1 billion in nominal value.  

The IMTN has been rated AAA/Stable by rating agency RAM Rating Services Bhd, with the ICP being rated P1, said DiGi.

Kuala Lumpur Kepong Bhd (KLK) saw its net profit decline sharply in its first financial quarter ended Dec 31, 2016 (1QFY17), mainly due to the absence of a one-off gain of RM485.7 million on disposal of plantation land in 1QFY16.

Net profit more than halved to RM360.68 million or 33.9 sen a share in 1QFY17 from RM795.21 million or 74.7 sen a share a year ago. Revenue, however, grew 26.7% to RM5.5 billion in 1QFY17 from RM4.34 billion in 1QFY16.

KLK said its plantation profit surged 53.6% to RM419.4 million in 1QFY17 from RM273 million in 1QFY16 on improved selling prices of crude palm oil (CPO) and palm kernel (PK) despite the increase in cost of CPO production and lower contributions from processing operations.

The average selling prices of CPO realised in 1QFY17 rose 37.9% to RM2,720 per tonne from RM1,972 per tonne a year ago, while that of PK rose 84.3% to RM2,648 per tonne from RM1,437 per tonne.

Sunway Real Estate Investment Trust (REIT) announced a lower distribution of 2.28 sen per unit in the second quarter ended Dec 31, 2016 (2QFY17), down 11.3% from the 2.57 sen per unit it posted in 2QFY16, primarily due to cessation of manager's fee payable in units, effective financial year 2017.

"On an annualised basis, this translated into a distribution yield of 5.3% based on the market closing price of RM1.72 as at Dec 31, 2016," the property investment company said in a media release this evening.

Sunway REIT's lower distribution was in tandem with lower net property income for the quarter, which came in 3.1% lower at RM94.06 million versus RM97.05 million a year ago, with net realised income sliding 8.8% to RM67.13 million from RM73.58 million previously.

For the first half ended Dec 31, 2016 (1HFY17), Sunway REIT's distribution per unit (DPU) came in at 4.55 sen, down 3% from the 4.69 sen it gave out last year, while net realised income slid 0.2% to RM133.86 million from RM134.14 million, though net property income was up 1.7% at RM190.12 million versus RM187 million previously.

Loss-making rubber products manufacturer Goodway Integrated Industries Bhd has withdrawn several corporate proposals announced last July, saying it requires additional time to enhance disclosure and information requirement.

The proposals include a significant diversification of its business through the acquisition of holistic security solutions provider S5 Systems Sdn Bhd, a wholly-owned subsidiary of NSA Technology Sdn Bhd, for RM900 million via a share issuance.

Goodway also said that it has mutually agreed with Maybank Investment Bank Bhd to terminate the latter’s service as its principal adviser with immediate effect.

Hektar Real Estate Investment Trust’s (Hektar REIT) net property income (NPI) slipped 4.1% to RM18.73 million for the fourth quarter ended Dec 31, 2016 (4QFY16), from RM19.53 million a year earlier, due to higher service and maintenance charges.

The REIT announced a distribution per unit (DPU) of 2.7 sen for the quarter, unchanged from the 4QFY15 payout and representing a dividend yield of 6.7%. Amounting to RM10.82 million, it will be paid on March 16.

In a statement today, Hektar said net realised income for the quarter fell by 5.6% to RM10.4 million from RM11.02 million in 4QFY15. This was despite a net income of RM12.01 million compared to a net loss of RM28.92 million previously, due mainly to the fair value gain from revaluation of the REIT’s investment properties.

The REIT’s revenue fell 2.4% to RM31.17 million from RM31.93 million in 4QFY15.

For the full financial year (FY16), Hektar posted a 7% drop in realised net income to RM41.5 million, while revenue was down to RM124.57 million from RM125.51 million in FY16.

Dialog Group Bhd’s net profit in the second quarter ended Dec 31, 2016 (2QFY17) rose 17.1% to RM91.36 million from RM78.01 million a year ago, mainly due to higher contributions from the group’s joint ventures (JVs).

Dialog said these JVs include the Pengerang Independent Terminals, which has fully leased out its storage capacity and secured better storage rates.

“The Group’s share of joint-venture results for the current quarter of RM25.1 million was 67% higher compared with RM15 million recorded in the corresponding quarter last year,” it said.

Revenue in 2QFY17 also climbed 34% to RM856.78 million from RM639.63 million.

For the first half of FY17, Dialog posted net profit of RM172.69 million, up 25.1% from RM138.08 million a year earlier.

Revenue, meanwhile, increased by 28.4% from RM1.18 billion to RM1.51 billion.

Moving forward, Dialog — an integrated technical services provider to the upstream, midstream and downstream sectors in the gas and petrochemical industry — remains optimistic that its business model is well-structured and can withstand the current oil price volatility and currency movements.

Tadmax Resources Bhd is revising the terms for its proposed rights issue with free warrants exercise in conjunction with the implementation of the amended Companies Act 2016, which imposes a no-par value regime.

Previously, companies that intended to raise capital were required to issue shares that were priced above their par value.

By imposing a no-par value regime under the amended Companies Act 2016, companies now have the flexibility to fix their new share issue price that reflects the market value.

In a filing with Bursa Malaysia, Tadmax said it is revising the indicative issue price for its rights share to 40 sen, which represents a discount of about 1.48% to the five days-volume weighted average price of its shares.

Based on such an indicative price, Tadmax is expected to raise up to RM87.74 million through this round of rights issue, compared with proceeds of up to RM109.67 million based on the previous requirement.

The group also revised its plan to utilise the proceeds, which involves halving the funds allocated for future investments to RM20 million, and reducing allocations for working capital to RM14.64 million.

MISC Bhd's wholly-owned unit Gumusut-Kakap Semi-Floating Production System (L) Ltd (GKL) has been awarded US$254.45 million (RM1.13 billion), after it obtained an adjudication decision in its favour in its case against Sabah Shell Petroleum Co Ltd.

GKL initiated the legal action last September, after it fell into contractual disputes with Sabah Shell over outstanding additional lease rates, payment for completed variation works and other associated costs for the construction of the Gumusut-Kakap Semi-Floating Production System (Semi-FPS), which is for crude oil production.
 
Today, MISC said the sum will be paid as increased day rates pursuant to the terms of the lease agreement dated Nov 9, 2012 that was signed between GKL and Sabah Shell for the construction and lease of the Gumusut-Kakap Semi-FPS.
 
GKL was also awarded applicable interest, and costs of RM308,634.04, said MISC in a Bursa Malaysia filing.
 
“The adjudication decision is binding on GKL and Sabah Shell, pursuant to the Construction Industry Payment and Adjudication Act 2012,” MISC said.

The decision, it added, is expected to have a positive impact on its earnings per share, gearing and net assets per share for the financial year ending Dec 31, 2017 onwards.

AirAsia X Bhd will suspend its flights from here to Mauritius next month as part of the budget airline's network restructuring to improve aircraft-utilisation efficiency, The Independent Singapore reported.

Quoting AirAsia X, The Independent Singapore reported that the final Kuala Lumpur-Mauritius flight will be operated on March 24 while the last Mauritius-Kuala Lumpur service will be on March 25.

"It (the suspension) is also to accelerate capacity growth in AirAsia X's key markets of Australia, China, Taiwan, Japan and Korea," AirAsia X said.

According to the news report, AirAsia X operates thrice weekly Kuala Lumpur-Mauritius flights.

The Independent Singapore reported that AirAsia X was the only airline offering direct flights from Malaysia to Mauritius after Air Mauritius stopped its direct flights in 2016.

AirAsia X Bhd confirmed the suspension of its services flights to Mauritius, citing operational restructuring and aircraft usage rationalisation.

Glove maker Hartalega Holdings Bhd’s third quarter net profit fell 9% on-year to RM66.2 million from RM72.8 million on recognition of unrealised foreign exchange loss and fair value loss of foreign exchange contracts.

However, its revenue for the quarter ended Dec 31, 2016 (3QFY17) grew 15% to RM456.3 million from RM398 million a year ago on higher sales volume, Hartalega told Bursa Malaysia in a filing today.

It declared a second interim dividend of two sen per share for the financial year ending March 31, 2017, which will be payable on March 29.

For the cumulative nine months ended Dec 31, 2016 (9MFY17), net profit slid to RM193.6 million from RM195.9 million a year ago, though revenue rose 18% to RM1.3 billion from RM1.1 billion, as operating profit margin declined on higher energy costs and more competitive pricing.

In a separate statement, Hartalega managing director Kuan Mun Leong said the group continues to see positive traction in topline growth and operating profit in its 9MFY17.