Companies in the news E&O, Versatile Creative, AirAsia, CIMB, Brahim's, 7-Eleven, Engtex, MRCB and IJM Corp

by **Cals** Sun 29 May 2016, 23:27

Companies in the news

[size=28]E&O, Versatile Creative, AirAsia, CIMB, Brahim's, 7-Eleven, Engtex, MRCB and IJM Corp

By Gho Chee Yuan / theedgemarkets.com | May 27, 2016 : 8:05 AM MYT
KUALA LUMPUR (May 26): Based on corporate announcements and news flow today, companies that may be in focus tomorrow (Friday, May 27) could include the following: E&O, Versatile Creative, AirAsia, CIMB, Brahim's, 7-Eleven, Engtex, MRCB and IJM Corp.

Eastern & Oriental Bhd (E&O) saw boardroom changes. Its founder and managing director (MD) Datuk Seri Tham Ka Hon has been redesignated as executive deputy chairman effective July 1.

Tham, who is also a substantial shareholder in E&O, will be replaced by Kok Tuck Cheong as MD of E&O. Meanwhile, it announced the resignation of Eric Chan Kok Leong as its board member and deputy MD, citing "expiry of contract and family reason".

On a separate matter, the property developer said it achieved record property sales amounting to RM1.1 billion for the financial year ended March 31, 2016 (FY16).

"We are responding to strong headwinds experienced by the industry at large, by adopting prudent cashflow management, restrategising and intensifying its marketing efforts, including extending its marketing reach and initiating new approaches to drive sales for its projects across Penang, Iskandar Malaysia in Johor and the Klang Valley," said Tham.

E&O sank into red with a net loss of RM14.78 million or 1.18 sen loss per share in the fourth quarter ended March 31, 2016 (4QFY16) compared to a net profit of RM100.5 million or 8.22 sen per share a year ago, mainly due to lower revenue recognition from its property projects. Revenue, however, rose 4.2% to RM149.03 million in 4QFY16 from RM143.04 million in 4QFY15.

The lower quarterly earnings also brought down its annual profit by 75.8% to RM36.8 million from RM152.09 million in FY15. Revenue dropped 6.3% to RM421.22 million from RM449.5 million, mainly due to lower revenue from its property segment.

Nevertheless, the group expects improved performance and results for FY17.

Versatile Creative Bhd, which was slapped with two unusual market activity (UMA) queries from Bursa Malaysia this month, disclosed that it has received an offer to undertake the construction of a plant.

Without specifying the details of the contract, the paperboard packaging products manufacturer said its board intends to deliberate on the offer as soon as possible.

"Pending a resolution to be passed by the board to accept the offer subject to certain conditions, the company shall engage an independent adviser to advise the company on the same," it added in a filing to Bursa today.

It also advised investors to trade its shares cautiously as there is no certainty that it will be taking on the project.

AirAsia Bhd reported a near six-fold jump in net profit for the first quarter ended March 31, 2016 (1QFY16) to RM877.79 million from RM149.33 million a year earlier, underpinned by higher passenger traffic and lower fuel costs.

Quarterly revenue was 31% higher at RM1.7 billion from RM1.3 billion, on the back of a 17% growth in the number of passengers carried to 6.48 million from 5.54 million.

According to the low-cost carrier, the passenger growth was well ahead of the 3% capacity growth, allowing the company to record a high load factor of 85%, it added in a statement.

Moving forward, AirAsia Bhd's group chief executive officer Tan Sri Tony Fernandes said: "In Malaysia, we are seeing robust demand despite the weaker consumer sentiment and domestic economy. In addition, the trend of local consumers trading down when going on their travel still persists while foreign nationals are still eyeing Malaysia as a value for money holiday destination due to our weaker currency."

He added that demand from Chinese travellers has recovered with a 37% jump in the number of Chinese guests flying into Malaysia during 1QFY16.

As for the cost going forward, he said the group's efforts to hedge 75% of its fuel requirements at an average cost of US$55 (RM223.56) per barrel have "paid off", and it is now relatively insulated from global fuel prices' volatility in the coming quarters.

CIMB Group Holdings Bhd's net profit for the first quarter ended March 31, 2016 (1QFY16) jumped 40.3% year-on-year (y-o-y) to RM813.8 million or 9.54 sen per share from RM580.12 million or 6.9 sen per share in the previous year, on lower costs and provisions.

It is worth noting that CIMB incurred massive RM202 million investment banking restructuring costs in the previous corresponding quarter.

The banking group told stock exchange today its revenue or operating income for the period rose 1.2% to RM3.73 billion from RM3.68 billion a year prior.

"The group posted a respectable performance for 1QFY16 despite the difficult operating conditions across the region, with y-o-y improvements in our consumer, wholesale banking and group asset management and investments divisions," said CIMB group chief executive Tengku Datuk Seri Zafrul Aziz in a statement.

The group said net profit for the quarter improved 4% compared to the business as usual 1QFY15 net profit of RM782 million, attributed to its strict cost control initiatives and declining provision levels.

In terms of key operating ratios, the group's loan to deposit ratio stood at 90.6% in 1QFY16 compared to 90.3% in 1QFY15, gross impaired loans ratio improved to 3% from 3.2%, while its cost to income ratio was lower at 57.4%, compared to 58% in the previous year.

Its net interest margins were lower at 2.62%, attributed to the higher cost of deposits in Malaysia. CIMB's total capital ratio stood at 15.4%, while the common equity tier 1 capital ratio strengthened to 10.6%.

Looking ahead, Tengku Zafrul said it will continue to adopt a cautious view on overall balance sheet growth, focusing on cost management, asset quality, capital management and governance, amid the challenging environment.

Brahim's Holdings Bhd, which posted its fourth consecutive quarter of net loss in the financial quarter ended March 31, 2016, said the collaboration between its 51%-owned subsidiary Brahim's SATS Food Services Sdn Bhd and 7-Eleven Malaysia Sdn Bhd, a subsidiary of 7-Eleven Malaysia Holdings Bhd, has come into effect, following the signing of a service agreement, its bourse filing revealed today.

Under the partnership, Brahim's SATS will plan, develop, and create menu specifications and products to be marketed through 7-Eleven's convenience stores. In turn, 7-Eleven will provide a centralised distribution centre for Brahim's SATS to deliver its products.

Meanwhile, in separate filings to the exchange, Brahim's said its memorandums of understanding (MoUs) with Servair Investissments Aeroportuaries (S.I.A.) and Dhyafat Albalad Alameen Co Ltd have lapsed.

To recap, Brahim's and S.I.A., which is a subsidiary of French airline catering company Servair, had entered into the MoU on Jan 21, 2015 to collaborate and improve commercial and industrial cooperation in airline catering business based on each other's 'know-how' competency.

The objective of the MoU was to draw on the parties' core competencies in the airline catering business and airport services.

Additionally it was to enable Brahim's to benefit from using the Servair brand mark and for S.I.A. to tap into Brahim's halal certification expertise.

Pipe maker Engtex Group Bhd has bagged a RM25 million contract from Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) to supply Ductile Iron (DI) pipes as part of Selangor's water pipe replacement programme.

Engtex group MD Datuk Ng Hook said in a statement today the contract was a positive step in the state's initiatives to replace ageing and leaking pipes in the water distribution system.

Ng added that the group intends to invest about RM15 million in capital expenditure (capex) in order to enhance its competitive edge in view of higher anticipated demand in the future.

He said the capex would be for new machinery to increase the DI pipe diameter from current 800 mm to 1,200 mm, as well as to expand its mild steel pipe production capacity from 42,000 metric tonnes (mt) to 66,000 mt per annum.

With the latest contract, it brings Engtex's outstanding order book to RM109 million. It is also tendering for projects worth about RM507 million both from the public and private sector.

Malaysian Resources Corp Bhd (MRCB) has been appointed as a project delivery partner (PDP) to develop the Kwasa Damansara township's main infrastructure by Employees Provident Fund's (EPF) wholly-owned unit Kwasa Land Sdn Bhd today.

Kwasa Damansara is a future township within 932ha (2,330 acres) in Sungai Buloh, Selangor. The Rubber Research Institute Malaysia was formerly located there.

MRCB said in a statement today, its wholly-owned subsidiary MRCB Builders Sdn Bhd would earn a PDP fee of 5% of the development cost estimated at RM2.2 billion.

The PDP work scope, the group said, included project management related to the design, procurement and construction of the main infrastructure within 640ha (1,600 acres).

IJM Corp Bhd saw a 54.98% year-on-year drop in its final quarter ended March 31, 2016 (4QFY16) at RM44.24 million, mainly due to lower contributions from the construction, property development, and manufacturing and quarrying divisions.

The diversified conglomerate told stock exchange that its bottom line was dampened by net unrealised foreign exchange losses.

Revenue fell 19% to RM1.17 billion, as there were smaller year-on-year sales contribution from IJM Corp's property development, manufacturing and quarrying, plantation, and infrastructure businesses.

In a separate statement, IJM Corp declared a total dividend of seven sen a share, comprising a special dividend of three sen a share and a single-tier second interim dividend of four sen a share. In total, its dividends in FY16 amount to 10 sen a share.

"The total interim dividend of seven sen per share declared in FY16 represents an increase from the 15 sen per share last year, after taking into account the expanded share capital base due to new shares issued as part of the consideration for the privatisation of IJM Land Bhd and the subsequent one-for-one bonus share issue to reward shareholders in 2015," said its group chief executive officer and MD Datuk Soam Heng Choon.

For the full year (FY16), IJM Corp's net profit grew by 65% to RM793.59 million from RM480.94 million a year earlier. Revenue, however, inched down by 5.87% to RM5.13 billion from RM5.45 billion, as its property development and plantation divisions brought in fewer sales.

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