KUB attracts interest as net cash pile soars after divestments

KUB attracts interest as net cash pile soars after divestments
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KUALA LUMPUR (June 29): Shares in KUB Malaysia Bhd soared nearly 17% to settle at 48.5 sen, with 6.5 million units done, exceeding the counter’s 200-day average volume of 3.01 million.

The diversified group announced two asset disposals this month totalling RM238 million in cash. These have effectively boosted the group’s net cash position from RM28.35 million as at March 31 to RM266.35 million.

Net cash per share stood at 47.9 sen based on share capital of 556.5 million.

The two asset divestments were palm oil estates measuring an aggregate 2,656 hectares in Kluang, Johor for RM158 million and the group’s entire 40% equity interest in KUB-Berjaya Enviro Sdn Bhd (KUBE) sold to Berjaya Group Bhd for RM80 million. The two were cash deals. 

KUB’s market capitalisation stood at RM269.89 million. Year to date, its share price has climbed 26.3%.

The group’s two largest shareholders are JAG Capital Holdings Sdn Bhd, which holds a 32.96% stake, and Anchorscape Sdn Bhd, with an equity interest of 20.18%, according to Bloomberg data.

JAG Capital is an investment holding company linked to the family of former finance minister II Datuk Seri Johari Abdul Ghani. Directors of the company include Johari, his wife Datin Seri Zurwati Haslinda Zainal Bahry, his son Amir Rasyidi Johari as well as CI Holdings Bhd group managing director Megat Joha Megat Abdul Rahman, according to news reports.

Meanwhile, Anchorscape is an investment holding company linked to Darhim Dali Hashim and Datuk Abdul Rahman Mohd Redza.

Darhim is a director of Prasarana Malaysia Bhd and the chief executive officer (CEO) of Radimax Group Sdn Bhd, a shipyard, engineering and vessel-building company, while Abdul Rahman is the Linggi state assemblyman from Umno.

KUB is involved in importation, bottling, marketing and distribution of liquified petroleum gas (LPG), oil palm plantations, information and communications technology (ICT) as well as construction of substations, transmission lines and interconnection facilities.

The group’s biggest revenue contributor is LNG, which accounted for 81.26% of KUB’s top line last year, followed by oil palm plantations or agro at 10.57%.

The company returned to the black in the first quarter ended March 31, 2020 (1QFY20), with a net profit of RM4.93 million, compared to a net loss of RM69,000 last year, thanks to higher revenue and the return to profit of its agro division.

Quarterly revenue grew 7% year-on-year to RM109.38 million, from RM102.26 million, contributed by revenue expansion for all business segments except for its ICT division, the group's stock exchange filing today showed.