HSL’s 2012 maiden contract marks a first of many over the next few months

Posted on February 15, 2012, Wednesday

KUCHING: Hock Seng Lee Bhd’s (HSL) recent contract win for the construction of the road from Balingian to Jalan Persekutan in Sarawak is in line with the view that construction projects in East Malaysia could finally gain some traction in the coming months.
“HSL’s subcontract agreement with PN Construction Sdn Bhd is reportedly worth RM82 million and its scope of works includes earthworks, drainage and culverts, road and bridges,” OSK Research Sdn Bhd (OSK Research) said in its research report.
The work on the project was slated to be completed in the first quarter of 2014. OSK Research noted that the recent award marked HSL’s maiden contract win for financial year 2012 which the research house deemed was in line with its expectations.
“Our financial year 2012 order book replenishment for HSL stands at RM400 million,” the report added.
OSK Research opined that the latest award tied in with its view that the slow-moving construction projects in East Malaysia could finally gain some traction, with the Sarawak Corridor of Renewable Energy (SCORE) leading the way.
Although the flow of contracts had slowed down substantially in recent months due to insufficient funding from the Federal Government, the research house believed that a ‘turn in fortunes’ could occur in the run-up to the general election.
AmResearch Sdn Bhd (AmResearch) echoed these beliefs in its own research report as it stated that this could be the start of a series of job awards this year to Sarawak’s construction players in tandem with SCORE.
“Notably, Baligian is the site of Sarawak Energy Bhd’s (SEB) proposed RM3 billion coal-fired power station. We understand that HSL is actively bidding for participation in energy-related projects,” the report said.
The research house also pointed out that HSL now had RM1.7 billion worth of projects in hand of which RM1.1 billion was outstanding.
“The company can see potential projects from the remaining packages of the Kuching central sewerage system worth approximately RM1.7 billion, additional flood mitigation packages worth RM250 million in Sibu, the development of a port and additional water treatment plants at Samalaju and some others in the pipeline,” according to AmResearch.

Linggi-owned and Graeme Brown-controlled Keresa Plantations profits from nearly 18,000 acres of palm oil

APPRECATION: Linggi (front right) presents a souvenir to Webber as (from right) Brown, Limar Group senior group general manager Khairul Azizan Alias and Keresa Plantations general manager AK Kumaran look on.

Keresa Plantations sees boost in sustainable palm oil production with RSPO, local smallholder cooperation

by Venu Puthankattil, venu@theborneopost.com. Posted on February 10, 2012, Friday

KUCHING: Sarawakian oil palm planter Keresa Plantations Sdn Bhd (Keresa Plantations) has seen improved efficiency as well as productivity in fresh fruit bunch (FFB) output thanks to guidance from the Roundtable on Sustainable Palm Oil (RSPO) as well as co-operative efforts with smallholders.
Keresa Plantations, a subdivision of Limar Group, started operations in 1996 and currently has a landbank of 6,023 hectares (ha) in Labang district between Bintulu and Belaga.
At a media conference, Keresa Plantations chairman Tan Sri Datuk Amar Leonard Linggi Jugah revealed, “Last year, we produced 134,673 metric tonnes (mt) of fresh fruit bunches (FFB) with a yield 25.9 tonnes per hectare per year.
“Sarawak’s average is 18mt per ha per year and national average is 19mt per ha per year so Keresa Plantations is slightly above the industry average in terms of yield. This is possible because we are small and we want to maximise efficiency in managing our plantation and running it professionally,” he said.
“We built a mill in 2007 running at a capacity of 45mt per hour which we have upgraded to 60mt per hour.
“We are also constructing another mill to be completed by December this year at a cost of RM60 million.
“When we started planting, the local Iban community wanted to follow suit. We decided to assist them by providing seedlings, fertiliser as well as generate employment and economic opportunities for them.
“That is very important to us because it gives us a good relationship with the local people and we have a good rapport with them,” he noted.
To maximise the productivity of the plantation, the company approached the RSPO whose guidance and requirements helped it to improve sustainability, help the local people within the area and gave it added advantage once it was RSPO certified.
Keresa Plantations was the first Sarawak-based company to have its mill certified by RSPO and with regards to this, Linggi said the certification had provided the company with a competitive advantage and opened up new markets.
Managing director of Keresa Plantations Graeme Brown remarked, “We are seeing the benefits of certification. Being RSPO certified has allowed us to communicate clearly to our consumers that we produce palm oil that is environmentally friendly and socially just.”
Representing RSPO was secretary general Darrel Webber who noted, “Companies like Keresa Plantations are one such example of how Sarawak should transform its cultivation of oil palm to sustainable standards in order to remain ahead of global trends and competition concurrently with responsible and conscientious practices.”
Certification under RSPO standards began in 2008 and since then the production of Certified Sustainable Palm Oil (CSPO) attained a share of 11 per cent of global crude palm oil.
Malaysia leads the global community as the world’s largest CSPO producer, commanding 48 per cent, leading other producing countries namely Indonesia, Papua New Guinea, South America and West Africa.

Hock Seng Lee to be a beneficiary of booming SCORE, Samalaju projects

Borneo Post February 11, 2012, Saturday

KUCHING: Hock Seng Lee Bhd (HSL) is set to benefit from the massive and rapid developments of the Sarawak Corridor of Renewable Energy (SCORE) and in particular, the Samalaju Industrial Park.
“We believe there will be a flurry of job announcements in the weeks and months ahead relating to Sarawak’s SCORE updates,” AmResearch Sdn Bhd (AmResearch) stated in its research report yesterday.
It highlighted some projects such as the Sarawak Hidro Sdn Bhd’s plan to ramp up the 2,400 megawatt Bakun hydroelectricity dam, Sarawak Energy Bhd’s (SEB) possible RM6 billion expenditure on the development of a coal-fired power station in Balingian, Mukah and a 500 kilovolt transmission network linking Bintulu to Kuching this year.
SEB had also recently formalised a second Power Purchase Agreement with OM Materials Sdn Bhd for a 20-year supply of 500megawatt to power the latter’s US$500 million manganese and ferrosilicon alloy smelting plant in Samalaju.
“This followed an earlier pact between SEB and Asia Minerals Ltd for the supply of 270 megawatt of power to a similar project estimated at RM790 million,” the research house informed.
The future appeared bright for HSL as AmResearch opined that it would be a direct beneficiary of the massive and rapid developments within SCORE, given its expertise in infrastructure and construction works and specifically in land reclamation.
“HSL currently has RM1.6 billion worth of projects in hand, of which RM1 billion is outstanding. We also understand that HSL is actively bidding for energy-related projects as well,” added the report.
AmResearch still anticipated some potential projects in the pipeline such as the remaining packages of the Kuching central sewerage system worth approximately RM1.7 billion, additional flood mitigation packages in Sibu worth RM250 million, the development of a port and additional water treatment plants at Samalaju and various road and rural water supply jobs.
With the numerous large-scale projects taking place in the state, the research house believed that HSL was well positioned for some multi-year rerating prospects, as it went on to peg a fair value of RM2.44 per share for the company.
It had also tweaked HSL’s earnings forecast for financial year 2011 by four per cent but increased its financial year 2012 and 2013 forecasts by one to five per cent, driven by the recent news flow.

Flood Drains in Kuala Baram in danger due to cement delays from monopoly suppplier

Shortage of cement delays drain project

January 4, 2012, Wednesday

THAT’S HOW IT IS: Mutang (left) briefs Lai (second left) on the project at the site.

MIRI: The prevailing cement shortage is delaying the construction of a monsoon drain to mitigate flood in Kuala Baram Industrial Estate here.
The RM1.9-million project is funded by Ministry of Industrial Development to address the frequent flooding in the area during the monsoon season which is made worse when it coincides with high tide and king tide.
Director of Semaring Logistic (M) Sdn Bhd, Mutang Tagal, who briefed Mayor Lawrence Lai on the project during his site visit yesterday afternoon disclosed: “Phase one of the project involving construction of a 280-metre long monsoon drain was supposed to be completed by the end of December. The acute shortage of cement experienced by us and others in the construction industry throughout the state is causing delay to the project.”
According to Mutang, the situation was made worse by the monsoon season which hampered their work.
“If we are able to get hold of the cement we ordered soon, we try to complete the job by the end of this month,” he assured.
The monsoon drain will help to discharge flood waters directly into the Baram River and then to the sea. The project also includes construction of a rubbish trap to ensure that logs and other floating debris will not float into the monsoon drain.Lai hoped that the project will reduce flooding in the area.

CMS has been having a cement monopoly in Sarawak for nearly 30 years.

Samling Profits 2011

Media Release
For Immediate Release
SAMLING GLOBAL ANNOUNCES FY2010/11 ANNUAL RESULTS
***** Profit Attributable to Equity Shareholders Surges 64.1% to US$20.7 Million
Improved Profit Performance; Strong Growth in the PRC and India
(HONG KONG, 22 September 2011) — Integrated forest resource and wood products company Samling Global Limited (―Samling‖ / the ―Group‖) (Stock code: 3938) today announced its annual results for the year ended 30 June 2011.
Financial Highlights
Financial year ended 30 June 2011 (US$’000) Financial year ended 30 June 2010 (US$’000) Change (%)
Revenue
US$729,047
(HK$5,686,566,600)
US$598,248
(HK$4,666,334,400)
+21.9
Gross profit
US$83,210
(HK$649,038,000)
US$57,351
(HK$447,337,800)
+45.1
Gross profit margin
11.4%
9.6%
Profit from operations
US$21,729
(HK$169,486,200)
US$18,092
(HK$141,117,600)
+20.1
Profit attributable to equity shareholders
US$20,746
(HK$161,818,800)
US$12,645
(HK$98,631,000)
+64.1
EBITDA
US$123,329
(HK$961,966,200)
US$94,238
(HK$735,056,400)
+30.9
Basic earnings per share
0.48 US cent
(3.744 HK cents)
0.29 US cent
(2.262 HK cents)
+65.5
Proposed final dividend
0.128 US cent
(1.0 HK cent)
0.080 US cent
(0.624 HK cent)
+60.0
*US$1 = HK$7.8
Key Highlights
 Revenue increased by 21.9% to US$729.0 million (HK$5,686.6 million) compared to the preceding financial year driven by increased sales volume and selling prices of logs
 Sustained profitability with gross profit and profit attributable to equity shareholders up 45.1% and 64.1% to US$83.2 million (HK$649.0 million) and US$20.7 million (HK$161.8 million) respectively
 India and the PRC were the Group’s strongest export markets and were key contributors to profit from logs and flooring product sales in the financial year under review
 EBITDA of US$123.3 million (HK$962.0 million) was 30.9% higher than the previous financial year