KUALA LUMPUR (May 24): Based on corporate announcements and news flow today, stocks in focus on Monday (May 27) may include: Hengyuan Refining Co Bhd, MISC Bhd, Dayang Enterprise Holdings Bhd, Kossan Rubber Industries Bhd, Eastern & Oriental Bhd, Malaysian Pacific Industries Bhd, D'nonce Technology Bhd, Petronas Chemicals Group Bhd, Malayan Flour Mills Bhd and TIME dotCom Bhd.
Hengyuan Refining Co Bhd said lower margins dragged its net profit down by 75% to RM21.57 million or 7.19 sen per share in the first quarter ended March 31, 2019 (1QFY19) from RM86.81 million or 28.94 sen per share a year ago.
Quarterly revenue declined 3.3% to RM2.96 billion from RM3.06 billion previously, primarily due to lower average price of US$70 per barrel, compared with US$76 a year ago, although sales volume was higher at 10.3 million barrels versus 10.2 million barrels last year.
Hengyuan said operating margin for the quarter was weak due to oversupply of products in the region and said it expects refining margins and crude prices to remain volatile in the near term, based on published forward market prices.
MISC Bhd announced a 64.4% jump in 1QFY19 net profit to RM510.5 million or 11.4 sen per share from RM310.6 million or seven sen per share a year ago, buoyed by higher vessel utilisation and better rates.
Revenue for the quarter came in 12.7% higher at RM2.28 billion, compared with RM2.02 billion a year ago.
The group declared a tax-exempt first interim dividend of seven sen per share, payable on June 25.
MISC said while 2019 as a whole is expected to be a better year for the tanker sector than 2018, continued Opec-led oil production cuts and the end of Iran oil waivers by the US are a concern as these may affect shipping volumes.
Dayang Enterprise Holdings Bhd said it has won a contract to provide procurement, construction, installation, hook-up and commissioning services for Roc Oil (Sarawak) Sdn Bhd.
The services will be provided under Roc’s Siprod (Simultaneous Production and Drilling) and Infill Drilling Campaign from 2019 to 2023.
Value of the contract is based on work orders issued by Roc Oil throughout the four-year contract duration — with an option to extend for another one year — and will contribute positively to the group’s earnings during the period.
Kossan Rubber Industries Bhd's 1QFY19 net profit increased 31.92% to RM58.72 million from RM44.51 million a year ago due to better performance from its core business segments, while revenue increased 15.96% to RM561.47 million from the RM484.18 million seen a year prior.
The group attributed its better performance this quarter to improvements in its glove manufacturing, technical rubber products and cleanroom products segments.
Kossan said its Plant 18 and Plant 19 is set to be fully commissioned by 3Q and 4Q of this year and will increase its production capacity by 5.5 billion gloves by the end of FY19.
Eastern & Oriental Bhd (E&O) posted a 16.27% increase in net profit for its fourth quarter ended March 31, 2019 to RM38.22 million from RM32.87 million a year ago, supported by continued strong inventory sales and recognition of progressive billings on handover of Tamarind and Ariza Seafront Terrace.
Quarterly revenue declined 11.19% on year to RM249.99 million from RM281.49 million previously.
The group declared a first and final dividend of three sen per share in respect of the financial year ended March 31, 2019 (FY19).
Full-year net profit fell 34.34% to RM61.92 million from RM94.3 million in FY18, as operating profit was dampened by holding costs for the acquisition of land by a joint venture that had lapsed. Revenue declined 9.81% to RM886.32 million, from RM982.71 million, on lower contribution from its property and hospitality segments.
Malaysian Pacific Industries Bhd’s (MPI) net profit plunged 35.5% to RM16.77 million in its third quarter ended March 31, 2019 from RM25.98 million a year ago, hit by a fall in contribution from its overseas segments and forex loss.
Nevertheless, the group declared a second interim single dividend of 17 sen per share for the quarter, payable on June 27.
Quarterly revenue contracted 9.9% to RM330.11 million from RM366.33 million previoiusly, as contribution from the US fell 28% on an annual basis.
Cumulative nine-month period net profit stood 5% lower at RM98.27 million, compared with RM103.43 million previously. Revenue dropped marginally by 0.6% to RM1.14 billion from RM1.15 billion in 9MFY18, hit by an 18% fall in contribution from its US segment.
MPI anticipates the operating environment to remain challenging for the rest of the financial year ending June 30, 2019, due to uncertainties in the global economy.
D'nonce Technology Bhd aims to raise gross proceeds of at least RM8 million via a renounceable rights issue to repay part of its bank borrowings, which as at May 23 totalled RM60.13 million.
This involves the issuance of up to 315.11 million rights shares and 315.11 million irredeemable convertible preference shares (ICPS), on the basis of one rights share and one ICPS for every existing ordinary share in D'nonce.
The rights issue comes with free detachable warrants on the basis of one free warrant-B for every two rights shares and two ICPS subscribed.
The final issue price is yet to be fixed, but the minimum issue price is five sen per rights share.
Petronas Chemicals Group Bhd (PetChem) announced a 25% drop in 1QFY19 net profit to RM802 million from RM1.07 billion a year earlier as revenue fell due to lower product prices and sales volume. Higher operating expenditure relating to maintenance activities also affected its bottom line.
Revenue contracted to RM4.13 billion in 1QFY19 from RM4.95 billion a year ago.
PetChem said it recorded lower plant utilisation of 95% as compared to 100% in the corresponding quarter, mainly due to higher level of maintenance and statutory turnaround activities at its methanol and aromatics plants respectively.
Sales volumes were lower in line with lower production, while overall average prices for the group decreased from the corresponding quarter in tandem with declining crude oil price.
PetCham said it will continue with its operational excellence programme and supplier relationship management to sustain plant utilisation level at above industry benchmark.
Malayan Flour Mills Bhd (MFM) is starting 2019 on a strong note — its net profit of RM19.87 million in 1QFY19 rose more than tenfold from the RM1.6 million recorded a year ago.
MFM attributed the improved performance to higher operating profit in the group’s flour and grains trading segment, supported by higher selling prices which lifted margins. Demand was also healthy and the company’s poultry integration segment also saw better profits on higher broiler production volume.
Revenue climbed 12.66% to RM635.17 million against RM563.82 million in the previous year's corresponding quarter owing to a 12% improvement in sales in its flour and grains trading segment, as well as a 14.4% sales jump in its poultry integration segment.
MFM expects its performance in 2019 to remain favourable as it has already made efforts to institute price increases in its flour and grains trading segment, which will protect margins.
TIME dotCom Bhd's 1QFY19 net profit rose to RM63.13 million, from RM62.94 million posted a year ago, while revenue soared by 13.8% to RM262.54 million from RM230.73 million previously,
The company attributed its performance for the quarter to higher sales recorded from all core product segments led by data and data centre businesses, which grew 15.2% and 8.9%, respectively.
Moving forward, the group will continue to work with its partners in Thailand, Vietnam and Cambodia to create a seamless regional telecommunications network which will connect Indochina to Malaysia and Singapore.