Cover Story: More large caps see on-year deterioration in net cash, debt position versus those that saw improvements

This article first appeared in The Edge Malaysia Weekly, on June 6, 2022 - June 12, 2022.
Cover Story: More large caps see on-year deterioration in net cash, debt position versus those that saw improvements
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LOOKING at the top 100 Bursa Malaysia-listed companies by market capitalisation, excluding banks, there were more companies that saw a decline in their net cash position or an increase in debt over the past year, compared with those that saw an improvement.

According to Bloomberg data, 52 companies saw a decline in their cash position between the end of the first quarter of 2021 and the end of the first quarter of 2022 — a comparison between conditions at the peak of the pandemic last year and as the country transitions to endemicity.

Tenaga Nasional Bhd saw the biggest deterioration in its cash position among the 52 decliners, with a RM17.5 billion increase in its net debt level to RM79.59 billion from RM62.08 billion.

Notably, property developers were also among the top decliners, led by IOI Properties Group Bhd, which recorded a RM4.88 billion increase in net debt, followed by Kuala Lumpur Kepong Bhd (RM4.34 billion increase in net debt) and Batu Kawan Bhd (RM4.2 billion increase in net debt).

Three of the big four rubber glove makers saw dips in their cash position.

Top Glove Corp Bhd saw its net cash position drop 78% from RM4.04 billion at the end of its first quarter of 2021 to RM879.7 million a year later, while Supermax Corp Bhd’s net cash level fell 25% to RM2.76 billion from RM3.68 billion. Hartalega Holdings Bhd’s net cash position saw a more moderate decline than that of its peers, down 8% to RM2.13 billion from RM2.32 billion.

Kossan Rubber Industries Bhd was the sole glove manufacturer among the big four to report a higher net cash position at RM2.33 billion, from RM753 million a year earlier.

Other notable companies among the top decliners include Axiata Group Bhd (net debt position increased RM2.64 billion), Genting Bhd (net debt position up RM2.57 billion), Malayan Cement Bhd (net debt position increased RM2.52 billion) and Capital A Bhd (net debt position up RM2.41 billion).

At the other end of the spectrum, Petronas Chemicals Group Bhd saw the largest improvement in its net cash position by value, rising RM2.4 billion year on year (y-o-y) to RM12.52 billion.

Other oil and gas players saw better debt positions. Bumi Armada Bhd reported a RM1.41 billion decline in net debt, UMW Holdings Bhd saw a RM404.5 million increase in its net cash position to RM988.2 million and Dagang NeXchange Bhd posted a RM398.9 million increase to its net cash level to RM422.8 million.

Semiconductor group Inari Amertron also reported a higher net cash of RM2.33 billion from RM753.6 million. Technology peer Greatech Technology Bhd saw its net cash grow 74% y-o-y, while D&O Green Technologies went into a net cash position of RM19.5 million, from net debt a year earlier.

Planters generally saw improvements in their debt levels, including Genting Plantations Bhd (net debt down RM955 million), Sime Darby Plantation Bhd (net debt lower at RM763 million) and Sarawak Oil Palms Bhd (now in a net cash position of RM382.2 million from a net debt of RM178.2 million).

Several telecommunications companies also saw improvements in their net debt levels over the past year, including Telekom Malaysia (net debt level down RM556.9 million) and Digi.Com Bhd (net debt level declined to RM307.6 million).


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