KUALA LUMPUR (May 10): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Wednesday, May 11) could include the following: Datasonic, MSM, TM, Iskandar Waterfront, Boustead, MAHB, PPB, Malaysia Smelting, YKGI and MISC.
Datasonic Group Bhd has been awarded a RM260.4 million contract to supply MyKad materials to the government. The 3½-year contract will begin July 1, 2016 through Dec 31, 2019.
The group told Bursa Malaysia today that its wholly-owned subsidiary Datasonic Technologies Sdn Bhd has today received and accepted the letter of award from Kementerian Dalam Negeri for the supply of 12 million units each of MyKad raw cards and MyKad consumables, to the National Registration Department.
The contract is expected to contribute positively towards the group's future earnings and net assets per share for the financial year ending March 31, 2017 and the financial years thereafter, said Datasonic.
Sugar refiner MSM Malaysia Holdings Bhd is confident of an improved financial performance this year, through better management of raw sugar costs and foreign exchange risks.
"We are managing the raw sugar costs by having Dubai operations," said MSM chief financial officer Aznur Kama Azmir, referring to the company's newly-launched trade office in the Arab city to handle sugar exports to the Middle East and North Africa.
"We are managing the forex, which is ringgit. We've covered for the second quarter, we are looking to cover the third and fourth quarter, looking at where the direction of ringgit is going by hedging," she added at a press conference after MSM's annual general meeting.
Aznur said based on the company's in-house study, the price of raw sugar is on an upward trend due to situations in Brazil and other producing countries.
"Based on our assessment, Brazil and Thailand will have a deficit. This will pressure the sugar price. We are monitoring it closely," she added.
MSM deputy chief executive officer Mohamad Amri Sahari said the group expects to do even better in FY16, despite the death of its chief executive officer Datuk Dr Sheikh Awab Sheikh Abod in April.
Amri said MSM's Dubai trading hub was expected to start contributing to the group in the first quarter of FY16. The Dubai office will be further complemented with a representative office in Jakarta, Indonesia.
Its Jakarta office is aimed at supporting clients on inbound and outbound transactions across the region, and will act as a gateway to other markets in Asia-Pacific.
Amri said the group would be able to save cost amounting to RM10.5 million in FY16 compared with RM17 million in FY15.
Telekom Malaysia Bhd (TM) and US-based Hurricane Electric signed a strategic partnership agreement to offer high-speed Internet in emerging Asian markets.
In a joint statement today, TM, which owns several Asia-Pacific submarine cable systems, said it was well-positioned to help Hurricane Electric grow its business in Asia.
"As a leading provider of fiber network throughout the region, TM is particularly well-positioned to enable the growth of HE's (Hurricane Electric) footprint in Asia, now and in the coming years.
"The terms of the agreement call for TM to leverage its ownership in multiple Asia-Pacific submarine cable systems linking the major regional hubs to new and growing markets in Asia. TM participates in key regional cable projects, including MCT, BBG, SMW5, and others," TM said.
Iskandar Waterfront City Bhd (IWCity) is proposing a private placement to raise up to RM65.91 million, mainly to pay suppliers for ongoing projects.
The property development company, controlled by tycoon Tan Sri Lim Kang Hoo, said the placement would entail the issuance of up to 66.97 million shares, representing up to 10% of its enlarged issued and paid-up share capital.
In a filing with to the bourse, IWCity said the maximum proceeds were based on an illustrative issue price of 98.42 sen per placement share, which represents the volume-weighted average price of IWCity for five market days up to May 6.
IWCity proposed to allocate RM44.9 million or 68.12% of total proceeds as payment to subcontractors, suppliers and professionals for ongoing projects in relation to the Pengerang and Eastern Dispersal Link contracts.
Apart from that, IWCity also intends to allocate RM15.2 million for land related expenses, RM4.31 million for working capital and RM1.5 million for estimated expenses for the corporate exercise.
Subsequent to the placement, Lim's shareholding would be diluted to 42.87%, while IWCity's gearing ratio would be lowered to 0.32 times.
The group expects to complete the corporate exercise by the third quarter of 2016.
Boustead Holdings Bhd has fixed the price for its two-for-five rights issue at RM2.55 per share, which is 25.22% lower than its theoretical ex-rights price (TERP) of RM3.41.
A filing with Bursa Malaysia today said the conglomerate that is 59.37%-owned by Lembaga Tabung Angkatan Tentera derived the TERP from a five-day volume-weighted average market price ended May 9 of RM3.76.
Malaysia Airports Holdings Bhd (MAHB) said its local airports recorded 6.95 million passengers in April, up 2.2% compared with 6.8 million passengers in the same month last year, according to its Bursa Malaysia filing today.
Its international passengers grew 4.4% to 3.4 million from 3.3 million; while domestic passengers rose 0.1% to 3.55 million from 3.54 million.
The passenger traffic at the Kuala Lumpur International Airport (KLIA) during the month dropped 0.4% to 1.96 million in April compared with 1.97 million in April 2015; while klia2 saw an increase of 7.5% in passengers to 2.16 million from 2.01 million.
Overall aircraft movements fell 4.8% during the month, with international and domestic aircraft movements declining 3.6% and 5.5% respectively.
MAHB said its Istanbul Sabiha Gokcen International Airport in Turkey saw a 10% increase in passengers in April this year to 2.38 million compared with 2.16 million in April 2015. Up to that month, it saw a 19.8% increase in passengers to 29.6 million, thanks to a 21.6% increase in domestic passengers to 6.16 million.
MAHB's Malaysian airports saw a 3.3% increase in passengers to 28.12 million compared with 27.21 million in the previous corresponding period.
International passengers grew 5.8% to 13.84 million from 13.09 million; while domestic passengers grew 1% to 14.27 million from 14.13 million.
MAHB said despite the reduction in aircraft movements in April, its Malaysian airports managed to record a positive 2.2% growth.
The company said the growth in international passenger traffic was contributed by significant improvement in the North East Asia and Middle East sectors, as well as at secondary airports.
Singapore-listed Wilmar International Ltd, in which PPB Group Bhd has an 18.55% stake, said today it expects challenging operating conditions in the second quarter after reporting a 3.2% rise in quarterly net profit, Reuters reported.
Wilmar, the world's largest palm oil processor and one of the biggest soybean buyers, reported a net profit of US$239.4 million for the three months ended March versus US$232 million a year earlier.
Core profit, which excludes non-operating items, fell 12.5% due to one-off provisions for impairment.
Wilmar said its tropical oils business posted an 8% rise in pre-tax profit at US$149.3 million. However, production yield fell 5%, hurt by the El Nino effect.
Its oilseeds and grains business posted a 2% rise in pre-tax profit at US$168.8 million, helped by volume and margin growth in consumer products and improvements in rice and flour operations.
Meanwhile, PPB, which owns a 40% stake in Vietnam-based Galaxy Studio Joint Stock Co through wholly-owned subsidiary Golden Screen Cinemas Sdn Bhd, expects its Vietnam cinema associate to double its profit contribution this year after increasing its stake in the unit.
Its head of corporate affairs Koh Mei Lee said prior to the fourth quarter ended Dec 31, 2015 (4QFY15), PPB's stake in the Vietnam unit was 25%.
She said Galaxy Studio was planning to open four additional cinemas under the Galaxy banner in FY16.
"With the higher capacity of screens and increased shareholding, we should be able to double what was achieved in FY15," she said.
Malaysia Smelting Corp Bhd (MSC) recorded a net profit of RM24.9 million in its first quarter ended March 31, 2016 (1QFY16) compared with a net loss of RM2.9 million a year ago, mainly on higher sales of refined tin.
A favourable valuation adjustment on tin inventory arising from the higher closing tin price at the end of 1QFY16 and a positive impact from foreign currency translations also contributed to the improved performance.
Its bourse filing today also showed a 7% rise in 1QFY16 revenue to RM408.4 million from RM381.6 million in 1QFY15.
In a separate statement, MSC said although base metal prices, including tin, are recovering from their lows in 2015, the outlook for the global commodity and resource sector is still unstable amid continuing concerns about global macroeconomic issues and Chinese consumption appetite for base metals.
"Despite these challenges and concerns, the underlying core operations of the group comprising Butterworth international smelter and the Rahman Hydraulic Tin Sdn Bhd mine are expected to perform satisfactorily for the current financial year," it said.
YKGI Holdings Bhd, a steel product manufacturer, has proposed to cancel the 50 sen par value of each of its shares by 40 sen to eliminate its accumulated losses and provide greater flexibility for the group to raise funds in the future.
As at Dec 31, 2015, its audited accumulated losses at the company level stood at RM10.64 million, which is expected to be fully offset against the credit of between RM139.34 million and RM187.4 million that will arise from the proposed par value reduction.
"The excess after such elimination shall be transferred to the share premium account of the company," it added.
It also has an outstanding of 95 million warrants 2013/2020 (warrants) with an exercise price of 50 sen per warrant; and 21.73 million redeemable convertible preference shares of 50 each — issued at an issue price of 60 sen each — which are convertible new YKGI shares.
Assuming none of the outstanding convertible securities are exercised prior to the implementation of the par value reduction, the exercise will give rise to a minimum amount of RM139.34 million. If all of them are exercised prior to that, it will see a credit amount of about RM187.4 million.
MISC Bhd today said it is not aware of the reason behind the unusual market activity (UMA).
After falling 13% to an eight-month low of RM7.25 yesterday, MISC shares closed 35 sen or 4.83% lower at RM7.60, for a market value of RM33.93 billion. The counter had a trading volume of 20.16 million.
In its reply to the UMA query issued by Bursa Malaysia earlier, the shipping giant said it was unaware of any corporate developments, rumour, report or any other possible explanation for the sharp fall in its share price yesterday.
Bursa Malaysia's UMA query followed MISC's corporate announcements in recent days. These included selling MISC Integrated Logistics Sdn Bhd to Swift Haulage Sdn Bhd for RM257.2 million, and its 1QFY16 net profit rising 17.42% to RM571.01 million.