Masteel, Litrak post better results

Masteel, Litrak post better results
Business & Markets 2013
Written by Ho Wah Foon
Monday, 03 June 2013 10:11


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KUALA LUMPUR: Based on corporate announcements, the stocks that may attract investor interest today include SIME DARBY BHD [], SCOPE INDUSTRIES BHD [], Malaysia Steel Works Bhd (Masteel), LINGKARAN TRANS KOTA HOLDINGS [] Bhd (Litrak), Petron Malaysia Refining & Marketing Bhd, MNRB HOLDINGS BHD [], GUAN CHONG BHD [], BLD PLANTATION []s Bhd and TH PLANTATIONS BHD [].

Sime Darby’s third quarter (3Q) ended March 31 net profit fell by 21% year-on-year (y-o-y) to RM691.25 million on the back of revenue of RM10.84 billion due to lower pre-tax profit contribution from its plantation, industrial, and energy and utilities divisions.

The fall in profit was accentuated by its plantation division, which holds the largest slice of Sime Darby’s profit contribution, as it fell by 26.56% y-o-y.

However, its motor, property and healthcare divisions registered growths to help offset other profit declines.

Consequently, earnings per share for 3Q fell to 11.5 sen from 14.58 sen in the same quarter a year ago.

For its nine months to March 2013, the conglomerate’s net profit also fell 21.67% to RM2.39 billion from the previous corresponding period’s RM3.05 billion.

Sime Darby, however, said it will be able to achieve its net profit target of RM3.2 billion for the full financial year ending June 2013 (FY13).

Scope may see its share price come under pressure after shareholders of Matang Holdings Bhd voted against a deal to inject Matang’s cash and plantations into Scope, which could invigorate the latter.

Matang chairman Datuk Tan Chai Ho told reporters last Friday the deal between Matang and Scope was off, “since shareholders did not agree to the merger of Matang and Scope at this EGM”.

The share price of loss-making Scope had climbed previously because of this proposed deal. Not surprisingly, its share price fell four sen or 13% to close at 26 sen last Friday.

Masteel said its proposed intercity rail transit network project in Iskandar Malaysia in Johor is on track.

Its 60% joint venture company Metropolitan Commuter Network Sdn Bhd has already received a letter from the Ministry of Transport consenting to the project.

The steel manufacturer had in 2011 entered into a joint venture with KUB MALAYSIA BHD [] to jointly build and operate a 100km inter-city rail system from Iskandar to Singapore to ease traffic congestion in Johor.

Masteel said it recorded a net profit of RM3.55 million in 1QFY13 ended March 31, compared to a loss of RM4.88 million in the previous corresponding period.

“We successfully recorded net profit due to lower production costs resulting from our efficient operations,” the company said.

It expects to record a satisfactory performance in the current year due to the implementation of its economic transformation programmes.

Litrak, the concessionaire of the Damansara-Puchong Expressway (LDP), raked in RM33.86 million in net profit for its final quarter ended March 31, 2013.

In the previous corresponding quarter, the company suffered a net loss of RM18.92 million.

For the full FY13, Litrak gained RM130.8 million in net profit or 25.69 sen per share on revenue of RM369.3 million.

The net profit was 57.25% higher than FY12’s RM83.18 million or 16.47 sen per share. FY12’s revenue stood at RM358.73 million.

Litrak attributed the rise in net profit to higher amortisation of highway development expenditure recognised by its subsidiary Lingkaran Trans Kota Sdn Bhd in FY12 based on the latest toll revenue projections prepared by independent consultants.

“As the projections were concluded at the end of 4QFY12, the entire adjustment was accounted for in that quarter in the financial statements of that subsidiary and the group,” Litrak elaborated.

Petron Malaysia’s 1Q ended March 31 net profit fell 63% to RM30.76 million from RM82.5 million a year earlier.

The company’s revenue, however, rose 5% to RM2.89 billion from RM2.75 billon. Net profit had fallen on higher cost of sales and finance expenses.

It said stronger sales had supported revenue growth but reduced product prices had contributed to its net profit decline.

Looking ahead, it said the on-going upgrade of its 88,000 barrel per day refinery in Port Dickson will enable the company to produce fuel which meets the more stringent global standards.

MNRB’s net profit for 4Q ended March 31 more than halved to RM17.15 million from the previous corresponding period’s RM36.52 million.

Its revenue for the quarter stood at RM549.68 million, up 25.5% from the previous corresponding quarter’s RM437.98 million.

MNRB’s FY13 net profit came to RM114.25 million, which was 31.04% higher than FY12’s net profit of RM87.19 million.

Its cumulative revenue was RM2.29 billion, up 13.58% from FY12’s RM2.02 billion.

Guan Chong saw a 47.2% dip in group net profit to RM16.5 million for 1Q ended 31 March, mainly due to continued weak consumer sentiments in traditional chocolate consuming markets, such as the eurozone.

The prolonged economic uncertainty in Europe has resulted in excess capacity among cocoa grinders in the continent, which further eroded profit margins of cocoa processing, said the company.

BLD Plantations said its net profit for 1Q ended March 31, 2013, slumped 99.8% to RM1.55 million from RM14.68 million in the same quarter a year earlier, due mainly to lower average price of palm oil products.

It said its revenue for the quarter fell 25% to RM369.92 million from RM494 million previously.

Earnings per share fell to 1.83 sen from 17.27 sen in 2012.

On its prospects, the company said it will continue to face the challenges of lower palm oil prices and higher costs.

TH Plantations said its net profit for 1Q ended March 31 plunged 75.4% y-o-y to RM3.21 million.

Similarly, its earnings per share fell sharply to 0.44 sen, from 2.53 sen in the first quarter of 2012.

Revenue fell to RM89.45 million, from RM95.05 million a year earlier.

TH Plantations said in a filing with Bursa Malaysia that the lower revenue was due to lower prices of crude palm oil and related products.

Apart from being hit by lower palm oil prices, the company’s profit was also affected by higher production, administrative, operating and finance costs linked to the issue of a sukuk.


This article first appeared in The Edge Financial Daily, on June 3, 2013.