DRB-Hicom, Bumi Armada, Ann Joo, TM, TIME, Lafarge, Sunway, Oldtown, Litrak, Scan Associates, Maybank and Green Packet

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KUALA LUMPUR, (Aug 27): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Aug 28) could include: DRB-Hicom, Bumi Armada, Ann Joo, TM, TIME, Lafarge, Sunway, Oldtown, Litrak, Scan Associates, Maybank, FGV, AAX and Green Packet.

DRB-Hicom Bhd, which owns national car maker Proton Holdings Bhd, slipped into the red with a net loss of RM19.72 million in the first quarter ended June 30, 2015 (1QFY16), compared with a net profit of RM107.84 million a year earlier, dragged by lower sales of motor vehicles.

Hence, it incurred a loss per share of 1.02 sen in 1QFY16, compared with an earnings per share of 5.58 sen in 1QFY15.

Revenue for 1QFY16 fell 20.8% to RM2.95 billion, from RM3.72 billion a year ago.

DRB-Hicom’s automotive business had suffered a 22.12% drop in revenue in 1QFY16. Automotive contributed 76% to the group’s total revenue.

In a statement, DRB-Hicom said the automotive industry is currently experiencing challenging motor vehicles sales, due to various factors, including more stringent loan approval policies, coupled with weaker consumer sentiments and more intense competition.

The group warned that the current financial year ending March 31, 2016 (FY16) will be a "very challenging year".

Offshore oilfield services provider Bumi Armada Bhd recorded a net loss of RM291.53 million for the second quarter ended June 30, 2015 (2QFY15), compared to a net profit of RM98.38 million a year ago, after it booked in a non-cash impairment charge of RM383.7 million.

The group said excluding the impairment charge, it would have posted an adjusted net profit of RM84.8 million.

Revenue for 2QFY15 dipped 22.2% to RM459.08 million, from RM590.08 million last year, primarily due to lower utilisation of the vessels under the offshore support vessel (OSV) and the transportation and installation (T&I) business units, it added.

It recorded a loss per share of 4.97 sen for the 2QFY15, compared to earnings per share of 2.08 sen last year.

For the six months ended June 30 (1HFY15), the group was in the red with a net loss of RM219.48 million, against a net profit of RM163.16 million in the previous corresponding period. Meanwhile, its cumulative revenue shed slightly by 2.62% to RM1.03 billion, against RM1.06 billion a year ago.

Tumbling international steel prices, which caused a write-down of its inventories, dragged building and construction materials supplier Ann Joo Resources Bhd into the red in its second quarter ended June 30, 2015 (2QFY15).

It saw a net loss of RM10.85 million or 2.17 sen a share, compared to a net profit of RM4.84 million or 0.97 sen a share a year ago.

In its filing to Bursa Malaysia, Ann Joo said its inventories were written down to a net realisable value of RM6.83 million in the latest quarter, while its margins were squeezed due to the fall in international steel prices and the surge in imported steel products from China.

The group also reported a 17.3% drop in revenue to RM501.27 million in 2QFY15, from RM606.33 million a year ago, mainly due to the depressed selling prices of various steel products and slowing business activities impacted by the implementation of the goods and services tax.

The same caused its financial performance in the first half ended June 30 (1HFY15) to deteriorate to a net loss of RM5.52 million or 1.1 sen a share, from a net profit of RM17.36 million or 3.47 sen per share year ago.

The group’s revenue in 1HFY15 contracted 20.9% to RM1.02 billion (1HFY14: RM1.29 billion).

Telekom Malaysia Bhd (TM) inked a 20-year construction and maintenance agreement (CMA) with TIMEdotCom Bhd's unit TT dotCom Sdn Bhd (TTdC) today, for the development and construction of a new submarine cable system, ‘Sistem Kabel Rakyat 1 Malaysia’(SKR1M).

The new submarine cable system is part of the government’s initiatives to increase the capacity of high-speed broadband, as outlined in Budget 2014 and 2015.

Under the agreement, TM and TTdC will cooperate with each other to provide, construct, operate and maintain SKR1M cable system.

The cooperation will also extend to “rules which shall govern the investment principles, voting rights, use of capacity, operation and maintenance obligations, as well as the implementation and management of SKR1M”, said TM in its filing to Bursa Malaysia today.

The capital expenditure (capex) to construct the SKR1M cable system will be shared based on the ownership interest of the respective parties, estimated to be 83.63% for TM and 16.37% for TTdC, according to TM’s filing on Bursa Malaysia.

Lafarge Malaysia Bhd’s net profit declined 18.1% to RM63.32 million for the second quarter ended June 30, 2015 (2QFY15), against RM77.33 million, on lower sales, lower interest income, and lower share of result from its associates.

Thus, earnings per share retreated to 7.50 sen per share, from 9.10 sen per share a year ago, its filing to the local exchange today showed.

Revenue for 2QFY15 also dipped 7.2% to RM665.55 million, from RM717.22 million last year, mainly due to lower sales registered by its cement, aggregates and concrete segments.

The group declared a second interim dividend of 8 sen per share in respect of the financial year ending Dec 31, 2015 (FY15), payable on Oct 21.

For the six months ended June 30 (1HFY15), Lafarge's net profit came in 9.4% lower at RM137.01 million, against RM151.26 million a year ago; while revenue contracted 2.3% to RM1.36 billion, from RM1.39 billion in 1HFY14.

Sunway Bhd chalked up 30% growth on its net profit for its second financial quarter ended June 30, 2015 (2QFY15) to RM237.91 million or 13.54 sen a share, from RM182.53 million or 10.59 sen a share, a year ago.

The impressive jump on earnings was mainly due to the higher fair value gain recorded by Sunway Real Estate Investment Trust (Sunway REIT).

The group’s revenue, however, dropped 13.6% in 2QFY15 to RM1.04 billion, from RM1.2 billion a year ago, as a result of the higher elimination of intra-group construction revenue which increased by RM230 million in the current quarter, and lower revenue from the trading and manufacturing segment.

The group also proposed a dividend of five sen per share, to be paid on a date to be determined later.

For the first half ended June 30, 2015 (1HFY15), Sunway reported a 34.2% increase in net profit to RM384.45 million or 22.03 sen per share, from RM286.52 million or 16.62 sen a share in 1HFY14, boosted by the realised capital gains of RM22.9 million from the sale of two properties in the first quarter and the share of higher fair value gain recorded by Sunway REIT.

Revenue for 1HFY15 fell 5.8% to RM2.1 billion, from RM2.23 billion a year ago, due to higher elimination of intra-group construction revenue.

Oldtown Bhd’s café outlet saw its sales contracted 19% for the first financial quarter ended June 30 (1QFY15). This dragged down its quarterly net profit to RM9.49 million or 2.15 sen per share, down 19% from RM11.7 million or 2.58 sen per share in the previous corresponding quarter.

The group’s total revenue declined by 6.5% to RM94.06 million during the quarter under review, from RM100.58 million in 1QFY15.

Despite a drop of sales in café chain, which represents 49.5% of total sales, Oldtown’s revenue in beverages manufacturing business increased by 10.33%. Beverages manufacturing represents the remaining 50.5% of its sales.

Oldtown acknowledged outlook for both its café chain and beverage manufacturing segments remained competitive and challenging, but will continue investing in advertising, promotion and marketing to strengthen its brand name.

Lingkaran Trans Kota Holdings Bhd (Litrak)’s net profit rose 23.8% in its first financial quarter ended June 30, 2015 (1QFY16), mainly due to its share of profit from an associate, Sprint Group, of RM5.2 million (1QFY15: loss of RM300,000).

In its filing on Bursa, the highway operator said the improvement was primarily after toll rates increased at Sprint Group’s Damansara and Pantai Toll Plazas from Jan 1.

Hence, its 1QFY16 net profit came in at RM43.49 million or 8.42 sen per share, versus RM35.12 million or 6.82 sen per share in the same period last year.

Revenue, however, only inched up 0.4% to RM96.17 million, from RM95.8 million a year earlier, underpinned by higher traffic volume.

Litrak also declared a single tier interim dividend of 15 sen for the financial year ending March 31, 2016, payable on Sept 29.

Moving forward, it is optimistic that a low but gradual increase in revenue, will be generated from the projected growth in traffic that ply the Lebuhraya Damansara Puchong (LDP).

Scan Associates Bhd, which slipped into Guidance Note 3 (GN3) status in May this year, has withdrawn its lawsuit against Bursa Securities, with costs of RM30,000 paid to the regulator and with no liberty to file afresh.

In a filing with Bursa Malaysia today, Scan Associates said it is of the view that the withdrawal of the suit is in the best interest of the company.

On May 8, Bursa Securities had issued a directive to Scan Associates to announce the company had triggered the GN3 criteria, based on the company’s fourth-quarter results ended December 2014 (FY14).

First, it incurred a loss of RM7.1 million in its FY14, which exceeded its shareholders’ funds of RM6.2 million. Second, its aggregate losses for two consecutive financial years, exceeded its shareholders’ funds.

Scan Associates had then appointed Messrs Lim, Chong, Phang & Amy to file a lawsuit against Bursa Securities, because the company disagreed with the directive issued by the regulator, as well as to seek damages from the regulator.

It was granted an ad interim injunction by the High Court on May 11, to restrain Bursa Securities from implementing the classification on the company, which was later dismissed by the Kuala Lumpur High Court.

Malayan Banking Bhd (Maybank) reported a 0.6% rise in its second quarter net profit at RM1.585 billion, from a year earlier, as net interest, Islamic banking and insurance income grew.

In a filing with Bursa Malaysia today, Maybank (fundamental: 1.5; valuation: 2.25) said lower taxes and minority interest also supported profit growth, as bad loan and investment allowance increased significantly.

Maybank said net profit for the second quarter ended June 30, 2015 (2QFY15) came in at at RM1.585 billion, compared with RM1.576 million previously. Profit rise came on the back of a revenue increase at RM8.94 billion, versus RM8.76 billion.

Its profit before tax and zakat fell to RM2.15 billion, from RM2.25 billion, as impaired loan allowance jumped to RM300.96 million, from RM154.35 million. Allowance for bad investments rose to RM94 million, from RM29.05 million.

Maybank's 1HFY15 net profit grew to RM3.28 billion, from RM3.18 billion a year earlier; while revenue expanded to RM18.12 billion, from RM17.12 billion.

The group plans to pay a dividend of 24 sen a share for the quarter in review.

Looking ahead, Maybank said it would focus on deposit taking and be more selective on asset growth, while emphasising on asset quality management and improving operational efficiency to grow bottom line.

AirAsia X Bhd said its auditors have discovered 24 payments totalling RM7.01 million made to a service provider, that are now established to be fictitious.

The long-haul discount arm of AirAsia Bhd said in its Bursa filing today the payments were authorised by a person in a management position within the company, but did not name the person.

It added that the board of directors could not make any announcement earlier as it did not have sufficient evidence to substantiate the allegations and to assess with certainty the financial and operational impact to the company.

Following this discovery of irregularities, AirAsia X has lodged a police report, adding that it has sought legal advice on the possible courses of action the company can take to recover the losses.

Reuters reported that Viterra Inc, the agriculture segment of Glencore PLC, said on Thursday that it agreed to buy Eastern Canada's largest oilseed processing plant from Felda Global Ventures Holdings Bhd.

Felda, the world's third-largest palm plantation operator, said it would sell the TRT-ETGO plant at Bécanour, Quebec to Viterra for C$190 million (US$143.43 million).

The sale, expected to close this year, is part of Felda's plan to boost revenues and cut costs and become one of the world's biggest agribusiness companies, it said in a statement.

The plant can crush 1.05 million tonnes of canola and soybeans annually, producing vegetable oil for food and industrial markets and meal for livestock feed.

Viterra already operates a canola crushing plant in Western Canada, at Ste. Agathe, Manitoba.

Green Packet Bhd returned to the black with a net profit of RM24.38 million for the three months ended June 30, 2015, from a net loss of RM50.32 million in the previous corresponding period.

Revenue was also higher by 8.2% to RM78.4 million, from RM72.4 million a year ago.

According to its chief executive officer Kay Tan, the positive progress made in its operational business pillars (solutions and communications businesses) was attributable to the group’s effective marketing strategy.

For the 12 months period ended June 30, 2015 (FY15), the 4G network operator and services provider posted a net profit of RM56.38 million, on revenue of RM339.14 million.

There was no comparative year-on-year figures, as its FY14 financial accounts were prepared for a period of 18 months ended June 30, 2014.

(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.)