Saturday, December 31, 2011

Semenanjung-owned Alam Maritim Bhd gets even more contracts in Sarawak

Alam Maritim bags Sarawak contract, outperforms peers

  Borneo Post December 30, 2011, Friday
GOOD UTILISATION RATES: Photo shows Alam’s anchor handling tug supply vessel MV Setia Fajar. OSK Research believes that about 50 per cent of Alam’s vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.
KUCHING: Alam Maritim Resources Bhd (Alam Maritim) is outperforming other public-listed offshore vessel operators in term of new contracts and quarterly earnings performance.
In the second quarter of financial year 2011 (2QFY11), the company chalked up a net profit of RM7 million, making further improvement in 3QFY11 with a net profit of RM13.4 million on the back of better vessel utilisation.
Elaborating on this trend, OSK Research Sdn Bhd (OSK Research) remarked, “We believe that about 50 per cent of Alam Maritim’s vessels are now on long-term charters averaging about a year while the balance 50 per cent are on spot charter.
“Athough its utilisation rate fluctuates monthly, we understand that on average it is still hovering at 60 to 80 per cent.
“Judging from the industry’s current operating environment, we believe this rate is reasonable in view of the fact that Petronas and its production sharing contractors and still handing out minimal new vessel contracts.”
Alam Maritim also announced that its wholly-owned subsidiary, Alam Maritim (M) Sdn Bhd, recently received an award from Sarawak Shell Bhd for the E8 and F13K modules offshore transportation and installation contract estimated at RM29.8 million.
The non-renewable contract which would be for a period of nine months, commenced in 4Q11 and was expected to be completed by May 2012.
The research house was positive on the development but no change to Alam’s FY11 and FY12 earnings, rationalising, “This is because we had earlier assumed that the company would secure some jobs to replenish its orderbook. The contract amount is also not substantial, making up only about 15 per cent of Alam’s total revenue.
“Although we think the group is out-performing its peers, this development has been partly factored into its share price valuation,” OSK Research stated, keeping its fair value for Alam unchanged at RM0.85 per share, based on the existing price earnings ratio of 12 times FY12 earnings per share.

Saturday, December 24, 2011

Sarawak not spared from global economic downturn

by Jasmine Chin Posted on December 23, 2011, Friday
KUCHING: As the gloomy outlook persists around the global economy, Sarawak despite the ongoing Sarawak Corridor of Renewable Energy (SCORE) programme will not be spared from the external headwinds.

SLOWER GROWTH: Image captures an overview of the Kuching city. Investments are expected to be postponed following the less than promising business sentiments premised on the gloomy global market outlook – Bernama photo.
An economist from RHB Research Institute Sdn Bhd (RHB Research) said that the state would see its growth trending on slower grounds, and foreign investments would not be flowing in as rapidly in the coming year.
“We are expecting gross domestic product to slow down to 3.6 per cent and this is premised mostly on macro-economic factors.  There is a lot of turmoil going on in the global market now and this will inevitably cause less than optimistic business sentiments. Despite the ongoing SCORE programme, Sarawak is still very much dependent on the export of its oil and gas as well as its natural resources.
“However, this is only a projection for the immediate term as I believe the Sarawakian state with its competitive energy rates offered to investors will seek to encourage an influx of investment in the long-run,” he said in a phone interview with The Borneo Post.
With a decelerating global economy putting the brakes on the local economic growth, he believed that the Bank Negara Malaysia (BNM) would most likely cut its overnight policy rates (OPR) by 25 to 50 basis points (bps) in the first half of next year.
“BNM has shifted its focus from inflation to growth and we believe it will likely be proactive and begin cutting interest rate early next year should the need arise. We expect it to trim the OPR by 25 to 50bps in the first half of the coming year, if global economic conditions worsen.
“The statutory reserve ratio of banks however will likely remain unchanged at four per cent of total eligible liabilities in the months ahead, as short-term capital has reversed into outflows gradually since June this year,” he pointed out.
In his view, following the peak of the inflation rate for the past 11 months, he believed that the rate would most probably moderate to an average of 2.8 per cent next year from the estimated 3.3 per cent initially noted.
“Similarly, month-on-month, the rate of inflation had eased to 0.1 per cent in November, after growing at a faster pace of 0.2 per cent in October and end of September. This comes to show that price pressures have abated somewhat but will remain sticky downward given the resilient domestic demand.
“On the whole, in the first eleven months of this year, inflation rate had picked up to 3.2 per cent year-on-year from 1.7 per cent the corresponding period of last year. As such, we believe inflation has reached its peak and we are expecting it to moderate to an average of 2.8 per cent next year,” he highlighted.
This was on account of slower global economic growth that would most likely translate into a more moderate increase in demand and lower price pressure.
He however, pointed out that should the government reduce its subsidies for energy, inflation could stay at an elevated level.
“If the government reduces its subsidies for energy, from fuel to gas supply for power plants and industries, once every six months according to the plan, that will lead to higher input costs and part of it will likely be passed on to consumers. Also traders are likely to take advantage of the situation to raise other retail products and services prices,” he said.

Wednesday, December 21, 2011

PNB: Agihan ASB 8.80 sen

Ahmad Sarji Abdul Hamid bersama-sama Hamad Kama Piah Che Othman menunjukkan replika pengagihan pendapatan ASB di Kuala Lumpur, semalam.

KUALA LUMPUR 19 Dis. - Permodalan Nasional Bhd. (PNB) hari ini mengumumkan agihan pendapatan Amanah Saham Bumiputera (ASB) sebanyak 7.65 sen seunit dan bonus 1.15 sen seunit bagi tahun kewangan berakhir 31 Disember 2011.
Pada tahun lalu, PNB mengumumkan agihan pendapatan ASB sebanyak 7.50 sen seunit manakala bonus pula sebanyak 1.25 sen seunit.
Pengerusinya, Tun Ahmad Sarji Abdul Hamid berkata, PNB memperuntukan bayaran sebanyak RM7.04 bilion melibatkan 7.3 juta pemegang unit yang melanggan lebih daripada 95.9 bilion unit ASB.
Peruntukan bagi pembayaran bonus pula berjumlah RM628.29 juta oleh PNB.
Ahmad Sarji berkata, sehingga 15 Disember ini, ASB telah memperoleh pendapatan kasar sebanyak RM7.19 bilion, yang mana pendapatan dividen pelaburan dalam syarikat-syarikat menyumbang sebanyak RM4.09 bilion.
''Keuntungan dalam penjualan saham syarikat-syarikat pula menyumbang sejumlah RM2.25 bilion atau 31.3 peratus kepada jumlah pendapatan kasar dan selebihnya RM0.85 bilion melalui pendapatan pelaburan instrumen-instrumen jangka pendek dan lain-lain pendapatan,'' kata beliau ketika mengumumkan agihan pendapatan ASB hari ini.
Turut hadir sama Presiden dan Ketua Eksekutif PNB, Tan Sri Hamad Kama Piah Che Othman.
Sementara itu, Hamad Kama Piah menyifatkan agihan pendapatan ASB pada tahun ini adalah terbaik selepas mengambil kira ketidaktentuan ekonomi dan pasaran kewangan sejagat.
''Jumlah agihan pendapatan dan bonus 8.80 sen adalah terbaik kerana ASB pelaburan jangka panjang,'' tambahnya.
Katanya, PNB telah memperuntukan sebanyak RM3 bilion sebagai rizab bagi ASB yang akan dibawa ke hadapan.
Menurut Hamad Kama Piah, pada tahun ini jumlah unit amanah ASB telah meningkat melebihi RM13 bilion berbanding RM12.1 bilion pada 2010. Setakat ini, jumlah dana ASB dan unit-unit amanah lain berjumlah RM17 bilion.
Ahmad Sarji menambah, pengiraan pengagihan pendapatan ASB berdasarkan kepada purata baki pegangan minimum bulanan bagi tempoh pelaburan sepanjang tahun kewangan ASB berakhir pada 31 Disember 2011.
Pengiraan bonus pula mengikut purata baki pegangan minimum bulanan yang dimiliki pelabur dalam tempoh 10 tahun bermula 2002 sehingga 2011.
Pembayaran pengagihan pendapatan dan bonus ASB akan dikreditkan dalam buku pelaburan pemegang unit dan buku pelaburan boleh dikemas kini mulai 3 Januari 2012.
Semua urus niaga ASB ditangguhkan mulai 21 Disember ini sehingga 2 Januari 2012 bagi tujuan pengiraan agihan pendapatan dan bonus.

Friday, December 16, 2011

Tiong family-owned Jaya Tiasa profits nearly RM 200 million every year from Sarawak logging and palm oil plantations

Jaya Tiasa to gain from increasing FFB volume and higher log prices

Borneo Post December 14, 2011, Wednesday
ROBUST GROWTH: Photo shows logging activities being undertaken in Sarawak.
KUCHING:According to RHB Research Institute Sdn Bhd (RHB Research), Jaya Tiasa recorded an average selling price (ASP) for its logs of RM741 per cubic metre (m3) in the first quarter of FY12 (1QFY04/12), an increase of 3.3 per cent quarter-on-quarter.
Jaya Tiasa is just one of many big companies owned by Sir Tiong Hiew King family made nearly RM 200 million profit from Sarawak for the year ending July 2011.  Sir Tiong Hiew King family related-owned  companies have been given over a million acres in Sarawak by Chief Minister Abdul Taib.
The high log prices were mainly due to acute shortage in log supply during the early part of 2011, as production was hampered by extremely wet weather condition in Sarawak. Log prices had since eased as log production volume normalised over the past few months.
“Due to lower log prices (we estimate its log prices to average about US$220/m3), we therefore expect Jaya Tiasa to report lower earnings from its log division in its upcoming 2QFY04/12 quarterly results,” RHB Research stated in its research report yesterday.
Jaya Tiasa’s strategy was to maximise its log exports quota first (50 per cent currently) before using its own harvested logs for downstream plywood manufacturing, as margins for logs were higher now compared with plywood. Hence, this was why the capacity utilisation rate of its plywood division remained low at only between 50 per cent and 60 per cent.
“The company typically produces lower-grade general plywood, but there had been a shift to produce more higher-grade plywood recently to take advantage of the higher demand from Japan after the March earthquake disaster. This is evidenced by the sharp 31 per cent increase in Jaya Tiasa’s plywood ASP to RM2,074/m3 in 1QFY04/12,” it stated.
With that, Jaya Tiasa was likely to continue to produce more higher-grade plywood in the near term, as current prices for general plywood had been rather weak due to the oversupply issue, while prices for higher-grade plywood had been holding up quite well.
The group also pointed out that its fresh fruit bunch (FFB) production volme was set to grow significantly by 30 per cent to 45 per cent per annum over the next few years as more oil palm trees come into maturity. Hence, this would drive Jaya Tiasa’s earnings growth going forward, despite the relatively flat CPO price assumptions of RM3,100 per metric tonne (MT) in 2012 and RM2,900/MT in 2013.
“Given the new FFB production targets by management, we therefore revise upwards our FY04/12-14 FFB production forecasts between two and four per cent. Our FFB production forecasts are usually higher than management’s targets, as Jaya Tiasa has always been conservative in guiding its FFB production target,” said the research firm.
As at July 31, 2011, Jaya Tiasa had about 15.5 million treasury shares, or about 5.5 per cent of its share base. It had been reluctant to sell its treasury shares to the market, as management deemed the share price was too low and did not truly reflect the earnings growth potential of the company.
RHB Research further pointed out that Jaya Tiasa’s management seemed to have warmed up to the idea of selling its treasury shares, although it stressed that it would only do it at the right time and at the right price. Jaya Tiasa hinted that it might sell the treasury shares in the future in order to raise funds for potential landbank acquisitions to reduce its gearing.
“Overall, we believe a sale of the treasury shares to the market will be beneficial for Jaya Tiasa as this will help to improve the trading liquidity of its shares,” said the research firm.
Going forward, RHB Research continued to favour Jaya Tiasa as there would be a significant boost to its earnings from plantation due to increasing FFB production volume and favourable CPO prices. This could provide ‘earnings comfort’ to investors and also help to cushion the more volatile earnings from timber.
Based on target price earnings ratio of eight times CY12 earnings for the timber division and 12 times CY12 earnings for the plantation division, RHB Research pegged its target price to RM7.28 per share, from RM6.71 per share previously, at a 10 per cent discount to sum-of-part-based fair value.

Saturday, December 10, 2011

Rimbunan Hijau increases business presence in China

Rimbunan Hijau shortlisted as lead company

Rimbunan Hijau will invite other Malaysian companies to jointly develop the Qinzhou-Malaysia Industrial Park in China

Nanning (China): Rimbunan Hijau Group has been shortlisted as the lead company from Malaysia to jointly develop the 55 sq km Qinzhou-Malaysia Industrial Park in south-west China, Prime Minister Datuk Seri Najib Razak said.

Najib said Rimbunan Hijau will invite other Malaysian companies, which can include government-linked companies, to participate in the development of the industrial park.

"They (Rimbunan Hijau) have strong financial back-up and good networ-king in China," he told the Malaysian media here yesterday.

The Chinese government has invited Malaysian companies to take up a 49 per cent stake in the joint-venture company to develop the park. The first phase of the park, covering 15.1km area, costs about 4.8 billion reminbi (RM2.37 billion).

Najib said works on the large-scale industrial park have started and the project will be launched soon.

He said the project is significant in the cooperation between Malaysia and China and will enhance trade between Asean and China as the park is near to Asean and is supported by a deepwater port.

Malaysian companies will be able to demonstrate their expertise to handle projects of such a scale, he added.

The prime minister said he has asked Malaysia-China Business Council chairman Tan Sri Ong Ka Ting to give special attention to the project.

"I will appoint him as Prime Minister's Special Envoy to China, so that he will have more influence to deepen the relations between Malaysia and China," he said.

The development of the industrial park, which will be done in three phases, is scheduled to be completed within 15 years.

By Business Times