Stocks to watch: UMW, IOI Properties, Bumi Armada among those in the frame

by **Cals** Tue 27 May 2014, 00:33

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Monday, 26 May 2014 09:53

KUALA LUMPUR: Based on corporate results announced last Friday, the following companies could be in focus today:

UMW Holdings Bhd’s net profit rose 7% to RM235.5 million in the first quarter ended March 31 of financial year 2014 (1QFY14), from RM219.7 million a year earlier, due to higher profit from the automotive and oil and gas (O&G) divisions.

UMW Holdings said revenue climbed to RM3.58 billion from RM3.36 billion, on higher sales of motor vehicles and O&G.

Looking ahead, UMW Holdings said its auto segment is expected to sustain its performance this year. This is despite anticipation of intense competition from new model launches.

Performance at the O&G division is expected to be satisfactory on secured orders for the company’s drilling rigs, UMW Holdings said.

IOI Properties Group Bhd’s net profit for 3Q ended March (3QFY14) plunged 70% to RM89.1 million, from 2Q’s net profit of RM300.2 million, due mainly to lower sales in Malaysia. Revenue for the quarter fell 8.5% to RM361.5 million, from 2Q’s RM395.2 million.

Net profit for the nine months totalled RM500.35 million, while cumulative revenue for the nine months stood at RM1.03 billion.

As IOI Properties was listed this year, there were no comparative figures from the previous year. The company sees the property market in Malaysia and Singapore remaining “challenging” in the high-end segment, but views the mass market segment in Malaysia as a revenue driver.

Bumi Armada Bhd posted a net profit of RM64.8 million for 1QFY14 ended March, down 41% year-on-year (y-o-y) from RM109.7 million. Revenue fell 4% to RM468.9 million, from RM488.8 million in 1QFY13.

Bumi Armada attributed the drop on revenue to lower activities in its transport and installation segment, due to “winter conditions in the Caspian Sea, where the LukOil project is located and the completion of the Armada Hawk charter in the previous quarter”.

Moving forward, the group said it remains confident of its fundamentals in the long term, in line with the positive outlook for the offshore O&G services sector.

In a separate announcement, Bumi Armada Bhd proposed a bonus issue of up to 1.48 billion new shares on the basis of one bonus unit for every two existing shares held.

It has also proposed a renounceable rights issue of up to 1.48 billion new shares to raise funds, on the basis of one rights share for every two existing units held.

Eastern & Oriental Bhd’s (E&O) net profit rose 34% to RM50.7 million for its 4QFY14 ended March from RM37.9 million in the previous year’s same quarter.

Revenue for the quarter increased 39% y-o-y to RM229.7 million, from RM164.7 million. For the full year, net profit was lower at RM113.4 million compared to RM129.6 million for FY13, while revenue fell to RM497.1 million from RM605.5 million.

Going forward, the company expects the current dampened sentiment on the property sector to continue over the next six months.

Kossan Rubber Industries Bhd’s net profit for 1QFY14 ended March, rose 10.8% to RM36.83 million, from RM33.22 million a year ago, on higher production efficiencies, superior quality of the gloves produced and the right product mix. Revenue for the quarter fell to RM306.17 million from RM327.27 million.

On prospects, the group is positive of increased turnover and profitability in its gloves division as world demand for gloves continues to rise.

This article first appeared in The Edge Financial Daily, on May 26, 2014.