Malaysia Rating Corporation (MARC) has revised DRB-HICOM's sukuk rating on its RM1.8b Islamic Medium Term Notes (IMTN) programme from stable to negative. The outlook recognises the potential weakening of DRB-Hicom's near-to-intermediate term financial profile, caused by its debt-funded acquisition of Proton Holdings. The rating agency said, “a key rating issue for DRB-Hicom in the context of the Proton acquisition is the more challenging debt maturity profile that would result from the acquisition-related interim-financing decisions and the execution risk associated with plans to deleverage post-acquisition.” (Starbiz)
Tenaga Nasional Bhd (TNB) is keen to pursue further investment opportunities in the energy sector in Pakistan. However, CEO Datuk Seri Che Khalib Mohd Noh wants the Pakistani authorities to relook the terms of its current power purchase agreement (PPA) in Sindh. "We're trying to overcome some small challenges (in the PPA), which we will overcome soon, and turn to a new chapter," he said at a media briefing after the Malaysia-Pakistan Business Council meeting here yesterday. TNB, through TNB Liberty Power Ltd, operates a 235MW combined-cycle natural gas power plant. It invested US$300m (RM906m) in the 21-year Liberty Power Plant project, launched in 2002. (BT)
IOI Corp will build a refinery in Indonesia once it generates enough feedstock from its plantations in Borneo island in the next three years, a top official said yesterday. Foreign firms have been scrambling to set up processors in the world's top producer of the tropical oil to tap higher margins after Jakarta last year slashed export taxes of the refined grade to half of that of the crude variety. IOI Corp's group executive director Lee Yeow Chor, said the firm's two Indonesian units will plant 25,000ha annually over the next three years - an ambitious target given it has planted 2,200ha in the financial year ended June 2011. "We are building up our planted Indonesian hectarage and in about three years time, we will have sufficient volume for a refinery," Lee said in an interview ahead of the Bursa Malaysia Palm Oil Conference next week. (BT)
IOI Properties Bhd's new shopping mall, IOI City Mall, will be sealing an agreement with one anchor tenant and one key tenant next month. Construction of the mall is on track to be completed by 2014, and will feature one-of its-kind entertainment park that has yet to be seen in any mall in the Klang Valley. The company's senior general manager, Lee Yoke Har said the total gross development value for the project was some RM2bn, with the mall taking up RM1bn. (StarBiz)
Felda settlers to get shares in SPV
The special purpose vehicle (SPV) that is being created to push through the listing of Felda Global Ventures (FGV) will take the form of an investment holding company (IHC) that will be entirely owned by Felda settlers. Settlers will be offered units in the IHC, similar to how PNB operates its Amanah Saham Nasional unit trust. The IHC will then subscribe to the pre-IPO allocaton of shares in FGV that was initially meant for Koperasi Permodalan Felda. The earlier proposal was for KPF to swap its 49% stake in Felda Holdings for a 37% stake in FGV. With the new structure in place, the FGV listing is expected to meet the June target despite concerns that it would be delayed due to the problems at KPF. (StarBiz)
CIMB in talks with RBS on Asia-Pacific acquisitions
CIMB CEO Datuk Seri Nazir Razak has confirmed that CIMB was in discussions with the Royal Bank of Scotland (RBS) on a potential acquisition of some of their Asia-Pacific investment banking and securities’ businesses. The Australian newspaper had earlier reported that CIMB would be buying RBS Australia’s equity operations. Other reports also speculated that CIMB had won the bid against China International Capital Corp to acquire the Australian equity operations for USD50m. (StarBiz)
IGB plans hotel REIT
IGB Corp is said to be mulling over a hotel REIT to unlock the value of its hospitality assets in the country and overseas. Observers said the hotel REIT will likely come about after the IGB’s 75%-owned KrisAssets successfully injects Mid Valley Megamall and The Gardens into a retail REIT later this year. The two retail assets have an estimated total asset value of close to RM4bn. IGB has 16 hotel assets, of which nine are located in Malaysia. (StarBiz)
Kimlun awarded RM72m contract
Kimlun has been awarded with the construction of extension building and ancillary building and alteration of an existing building of a shopping mall in Johor Baru, Johor by Tanah Sutera Development SB for RM72m.The construction work is expected to be completed by end-November 2012. The company’s orderbook stood at about RM1.2bn as at 31 Dec 2011. (Malaysian Reserve)
Deepak re-emerges in Envair with 12.4% stake
Deepak Jaikishan has re-emerged as a substantial shareholder in Envair Holdings after acquiring 14.7m shares representing a 12.4% equity interest since last Friday. This comes less than three months after he exited the company in December 2011. Deepak acquired the shares through off-market transactions. Media reports said Deepak is planning to inject some oil and gas business into Envair, a water and air filter manufacturer, has been posting losses for years. (Financial Daily)
Tan Chong expects its Vietnam unit to gain momentum with the commencement of its manufacturing plant in Danang by the middle of this year. The RM51.15m Danang plant manufactures, assembles and sells buses, trucks and passenger vehicles and provides after-sales service. The plant is targeted to produce 1,200 units of trucks annually and will gradually increase its production volume to 12,000 units a year for the next five years. (Malaysian Reserve)
Muhibbah Engineering, one of the contractors for the RM1.4bn APH project has filed a suit against APH Sdn Bhd, and the managing contractor, ZAQ Sdn Bhd, for overdue claims amounting to RM381m. (BMSB, Financial Daily)
Carlsberg Brewery Malaysia, faced with costlier raw materials like malt and aluminium packaging, is mulling price hikes in its beer range as early as the next quarter. "The rising input cost of products particularly malt - the key ingredient in brewing beer - is 20% higher this year. Last year, the cost of aluminium cans had also increased 27% from 2010 while electricity and natural gas tariffs also went up in mid-2011," said Carlsberg managing director Soren Ravn. (BT)
Carlsberg Brewery is planning to brew another one of its premium beers in Malaysia this year in order to capture more market share. "Within the next three to six months, we will start production of Kronenbourg [1664] and [Kronenbourg] Blanc here. So we get one more brand in our premium portfolio produced here," managing director Soren Ravn said. The company's target is for its premium beer brands to have a 20% market share in the premium beer segment in 2012, up from 16% in 2011, he said. (Financial Daily)
Petronas has resigned from a consortium exploring Indonesia’s East Natuna gas project, Asia’s biggest untapped gas reserve, Indonesia’s state oil and gas company Pertamina said yesterday. “We received confirmation from our upstream director Muhammad Husen that Petronas has backed down as our partner in East Natuna,” Pertamina spokeswoman Wianda Pusponegoro said yesterday. In Dec-2010, Pertamina signed agreements with Exxon Mobil, Total and Petronas as partners to develop the Natuna gas field. (Reuters)
Tricubes Bhd, the enabler of the 1Malaysia email account, saw its nine-month net loss widen to RM2.95m as at Dec 31, 2011 from RM0.26m in 2010. Tricubes said the 1Malaysia email project and the appointment by Royal Malaysian Police as the collection agent of traffic summonses via automated teller machines and enquiry about summonses via SMS are expected to have a positive impact on the results in 2012 and subsequent years. (Bernama)
Genting Plantations: FY2011 net profit up on higher price
Genting Plantations’ net profit for FY2011 rose 36.34% to RM442.0m from RM324.2m, boosted by higher palm products prices and higher fresh fruit bunch (FFB) production. Revenue grow 35.2% y-o-y to RM1.34bn while EBITDA margins for its Malaysian plantation segment widened to 52% compared with 50% a year ago as stronger selling price of palm products offset the impact of higher operating expenditure. The group achieved an average selling price of RM3,240 per tonne for crude palm oil and RM2,235 per tonne for palm kernel. However, the group said its plantations in Indonesia posted higher losses in FY2011 as the ongoing expansion is still in the early stages of development. (Financial Daily)
Boustead: Reports RM831m pre-tax profit
Boustead Holdings has registered a pre-tax profit of RM831m for FY2011, a 14% jump from RM726.2m the previous year. Revenue rose to RM8.555bn from RM6.181bn. The company said the hike in revenue and profit was mainly due to higher sales volume from its business segments, including 31% increase in revenue for the manufacturing & trading division. The plantation division's revenue increased by 28%, mainly on stronger palm product prices and better fresh fruit bunches crop. (Business Times)
JT International: Post lower earnings
JT International posted a 33.9% y-o-y drop in net profit to RM18.07m for 4Q FY2011, due to lower sales volume and higher marketing expenditure. Revenue for the quarter under review declined 4.3% y-o-y to RM265.6m. For FY2011, the Malaysian division of Japan Tobacco International posted a 8.2% year-on-year drop in net profit to RM122.8m while revenue declined 0.6% to RM1.198bn. JTI Malaysia mainly attributed the decline in performance to the lower sales volume of its Winston cigarettes, which was also offset partially by higher cigarettes prices. (StarBiz)
MAA Group: To dispose of its Indonesian insurer
MAA Group said it is selling its Indonesian subsidiary, PT MAA Life as part of the rationalization exercise to focus on its core business in Malaysia. It said its wholly-owned subsidiary MAA International Assurance Ltd has entered into an agreement with Tokio Marine Holdings Inc to dispose of a 43.3% stake in PT MAA Life for 27.4bn rupiah (RM9.1m) cash. The group said the cash proceeds from the disposal will be used for working capital purposes. (Financial Daily)
UMW: Expects higher revenue, profit this year
UMW Holdings expects its revenue and profit to increase by 5% to 8t% this year bolstered by higher contribution from its automotive segment. President and group CEO, Datuk Syed Hisham Syed Wazir, said the group planned to launch new and facelift models this year and they were expected to boost demand. Meanwhile, the company said it expected UMW Toyota and Perodua to sell a total of 281,000 cars this year, a 3.9% increase, compared with last year. The group also expects the revenue of the oil and gas segment to improve this year in consideration of a full-year contribution from Naga 3 as well as higher day-rates for its land rights, Ghazal 3 and 4 as well as a full-year contribution from Ghazal 5. Profits would also improve further with the installation and commissioning of equipment and facilities for the Garraf Power Plant in Iraq which was expected to be substantially completed this year. (Bernama)
Star Publications: Print, new media segments lift profits
Star Publications’s net profit rose to RM186.6m for FY2011 against RM184.9m posted a year earlier. Revenue for the period rose 0.6% RM1.067bn from RM1.061bn previously mainly due to improved full-year revenue of print and new media segment and the broadcasting segment. Pre-tax profit declined to RM250.5m from RM258.8m mainly attributable to the decline in the performance of the event, exhibition, interior and thematic segment. EPS for the financial year rose to 25.28 sen from 25.04 sen in the previous corresponding period. Revenue of the print and new media segment for the current year improved to RM821.62m, compared with RM801.8m due higher advertising revenue in its print media. (StarBiz)
Shipping: Tax on local vessels needs review
Owners of Offshore Support Vessels (OSVs) in the oil and gas industry, are urging the Government and local banks to look into tax and financing issues affecting their business. According to Malaysia OSV Owner's Association president Tasripin Masotee, local vessel owners were facing stiff competition from foreign-owned vessels (including Labuan registered vessels) that were offering lower daily-charter rates by as much as US$1,000 (RM3,015) to US$2,000 (RM6,030) per day. He said factors that had led to the “uncompetitive” charter rates offered by Malaysian-owned vessels included unfavorable fiscal and monetary legislation on corporate tax, high operation and maintenance costs in Malaysia due to tax, work permit fees for foreign crews, and comparatively high cost of financing from local banking institutions. Tasripin cited Singapore as offering a more favourable environment for OSV owners. (StarBiz)
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