Thursday, March 29, 2012

Rio Tinto, CMS scrap US$2b smelter project in Sarawak

KUALA LUMPUR (March 27, 2012): Rio Tinto, the world's third largest miner, and Cahya Mata Sarawak Bhd (CMS) have scrapped plans for a US$2 billion aluminium smelter project in Malaysia's Borneo island state of Sarawak as power supply terms could not be finalised, CMS said in on Tuesday.
CMS, a financial and construction conglomerate based in Sarawak, said both companies had worked to set up an aluminium smelter for years but could not agree on the commercial power supply terms with Sarawak Energy Bhd.
"As a result, Rio Tinto Aluminium (Malaysia) and CMS have agreed that they would cease to pursue plans to jointly develop an aluminium smelter at Samalaju in Sarawak but remain open to other future possible collaborations," CMS group managing director Richard Curtis said in a statement.
The aluminium smelter was supposed to have an annual capacity of 1.5 million tonnes to meet surging demand from China and other developing economies.
But the project, which was first announced in 2007, had not gone beyond the planning stage due to delays in constructing Bakun dam -- one of the world's largest hydroelectric dams -- that would provide cheap power to energy-guzzling smelter.
Malaysia's government last year set a lower rate on the power generated from the Bakun dam in Sarawak, selling it to Sarawak Energy at 6.25 sen per kilowatt hour (KwH) with an expected increase of 1.5% every year.
The new rate is within Sarawak's offer to buy electricity at 5 sen and 7 sen per KwH in order to secure investments from smelters for whom energy accounts for a third of costs. – Reuters

Rumor has it that the broker for deal was asking too much from Rio Tinto as a bribe to get Sarawak Energy Berhad to sell electricity to Rio Tinto at a loss to the government-owned Sarawak Energy Bhd.

Saturday, March 24, 2012

Shin Yang becomes monopolistic behemoth with vessels buy from small rival Swee Joo Bhd

Syscorp builds on fleet, buys vessels worth RM100mil

By Jack Wong

KUCHING: Shin Yang Shipping Corp Bhd (Syscorp) has acquired more than 20 vessels, mostly container ships and chemical tankers, from financially-troubled Swee Joo Bhd.
Swee Joo, one of Sarawak's oldest and most established shipping firms, is under voluntary liquidation due to insolvency.
Sharehoplders voted to wind up Swee Joo five months ago after the group failed to resolve total borrowings of some RM460mil.
Ting: ‘We are now doing maintenance and upgrading works for most of the acquired vessels.’
Syscorp chief executive officer Capt Ting Hien Liong said Swee Joo's vessels were bought for more than RM100mil with bank borrowings.
The fleet include four chemical tankers, which were previously used to transport crude palm oil and products.
“We are now doing maintenance and upgrading works for most of the acquired vessels. It will take between six and eight months to complete.
“Some of the vessels' engines have broken down and we have to replace them,” Capt Ting told StarBiz yesterday.
He expects the maintenance and upgrading works to cost around RM50mil.
Syscorp has put three other acquired (Swee Joo) vessels into service.
With the acquisition, Capt Ting said Syscorp now owned and operated a fleet of more than 300 vessels, most of them cargo ships.
Syscorp's shipping operations cover both Malaysian and international waters, from South-East Asia region to East-Asia region and Far-East region to Gulf region in the Middle East countries.
Last year, Syscorp embarked on a RM266mil fleet expansion programme that involves the construction 11 vessels of different types. They comprise two cargo vessels, five units of 37m anchor-handling tugs, two 23.8m tugboats and two pneumetic cement ships.
The expansion is due for completion by end-2012.
Besides shipping, Syscorp, whose parent company is the diversified Shin Yang group, is into shipbuilding and repair business. It has two shipyards in Kuala Baram, Miri and in Bintulu, which can build vessels up to 15,000 deadweight tonnes.
The group owns and operates a third shipyard in United Arab Emirates (UAE).
Miri-based Shin Yang group, headed by Tan Sri Ling Chiong Ho, is involved in a vast logging and downstream timber processing business and is Sarawak's largest plywood manufacturer. The group controls Sarawak Oil Palms Bhd and is into property development, construction, quarrying and trading businesses.
Capt Ting said the new UAE shipyard was doing maintenance works for mostly Syscorp's fleet of vessels.
When asked about the shipping industry's outlook, he said with the exception of oil and gas industry, shipping rates, especially cargo transportation, were still poor.
He said over-capacity was still a problem as many new ships under previous orders had come into the market.
Capt Ting said the shipbuilding industry was also facing tough times.

Sunday, March 18, 2012

Ling Brothers and Hasmi Hasnan-owned Dayang Enterprises records biggest profit ever

Dayang records highest profit of RM83.9 million in 2011

Borneo Post February 29, 2012, Wednesday
READY FOR GROWTH: Dayang is hopeful about the upcoming tenders of major hook-up and commissioning contracts from PCSB and Shell Sarawak/Sabah worth more than RM7 billion in total.
KUCHING: Dayang Enterprise Holdings Bhd (Dayang) posted the highest ever year-to-date profit after tax of RM83.9 million in 2011, an increase of 23.9 per cent from RM67.7 million recorded previously.
Revenue for the financial year ended December 31, 2011 also rose to RM382.3 million an increase of 50 per cent, versus the corresponding period of the previous year at RM255.4 million.
In a filling to Bursa Malaysia recently, Dayang said all segments registered higher revenue this year as compared with the previous year with offshore topside maintenance (TMS) contributing RM125 million or 99 per cent of the increased revenue.
More importantly, on top of the good set of financials, the group also posted an impressive health safety performance. As of end January 2012, it achieved a record of 25 million man hours without loss time injury since 2004. This was an added advantage for Dayang to position itself as a strong and proactive player in the industry.
With the good track record, Dayang will be in a strong and competitive position to technically qualify for the upcoming tenders of major hook-up and commissioning contracts amounting to more than RM7 billion, from Petronas Carigali Sdn Bhd (PCSB), Shell Sarawak/Sabah and ExxonMobil.
On the commercial front, Dayang’s order book stood at about RM1.4 billion with sizeable contracts being the PCSB topsides structural maintenance project worth RM802 million, PCSB hook-up and commissioning project worth RM200 million and Sarawak Shell & Sabah Shell Topside Maintenance Contract worth RM350 million.
Dayang’s board remained positive of its prospects for financial year 2012 as it has on-going contracts exceeding RM1.4 billion to last at least until 2016 and at the same time looking positively to replenish its order book.
The Group had a good start in 2012 when it secured a contract worth RM125 million from Talisman and another RM80 million contract for its workboat MV Dayang Zamrud with Brunei Shell.
Dayang’s Board declared a five sen per share single tier tax exempt second interim dividend, which would be payable on 12 April 2012.
On the prospects of Dayang Group, RHB Research believed focus would be on FY13 earnings and beyond, reflecting its view that significant development and maintenance work would and contract wins could propel Dayang to new heights.
It pegged Dayang’s fair value at RM2.35 per share, based on target 13 times FF12 earnings per share.

Monday, March 12, 2012

Yong Ing Hui expands market share in tugboat and shipping business

Gimhawk Group sets up subsidiary company

by Wilson Kong Posted on November 11, 2011, Friday

GROWING BUSINESS: The tugboat that Gimhawk Group is building.
SIBU: Gimhawk Group has reached another milestone of sorts in the shipping business by opening a subsidiary company, Gimhawk Enterprise Sdn Bhd, at a commercial centre in Jalan Wong King Huo here yesterday.
The company provides all-round services to customers, such as shipbuilding, shipping, forwarding, ship repairing, marine engine, generator, heavy machineries and spare part trading.
Gimhawk Group founder and president, Yong Ing Hui, has a vision to achieve the title of a world-class builder of superb quality vessels with comprehensive safety equipment and advanced navigation system at competitive prices.  Its business has expanded to overseas with rising annual turnover since 2003.
With only a handful of workers initially, the number has grown to over 200 now.
In a press conference here yesterday, Yong said his success did not come easy as one might think.
“My wife and I have faced many setbacks in the past, the worst one was during the global economic crisis in 1997 when the company was officially set up,” he recalled.
“I must thank my wife, Lee Sui Eng, who is the financial director of Gimhawk Enterprise Sdn Bhd, for her support and patience,” he said, adding that during the severe economic crises in the 1980s, many companies here failed but not Gimhawk Enterprise.
Yong said transformation was vital to overcome hardships in any business.
“Any company in the service business must learn to transform to suit the changing time and to tap opportunities during a crisis. There is opportunity in every doldrum.”
He added that the two key elements in bringing his company to greater height were (right) ethics and attitude.
On a more personal note, Yong, who is a father of five, said it was his wish to have all his children going into the family business.
“My three sons and two daughters have returned to help us (in the business) after their graduation,” he said smiling, and thanked God for his success.
“We reciprocate by donating to the Shen Dao Methodist Church where we go regularly for praise and worship,” he sai

Tuesday, March 6, 2012

CIMB hits record RM4b net profit for FY11, a 15% growth

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CIMB Group Holdings Bhd posted a record net profit of RM4.03 billion for its financial year ended Dec 31, 2011 (FY11) — a 15.1% growth year-on-year (YoY), in spite of subdued revenue growth. Net return on equity (ROE) was also a record high of 16.4%, although slightly below the bank’s target of 17%.

CIMB group managing director/ chief executive officer (CEO) Datuk Seri Nazir Razak, during the bank’s media briefing in Kuala Lumpur, said he was “very pleased” with the results.

“We delivered record profits and ROE in a year when revenue growth was subdued due to the high 2010 non-interest income base, compressing interest margins, and our more cautious approach to asset growth.”

The bank’s primary disappointment, said Nazir, was its share price which significantly underperformed benchmarks. “I don’t believe in tactics to boost share price. We will continue to be as transparent as we can, and let the investors decide. Let the market take its course.”

For the fourth-quarter (4Q) alone, CIMB's net profit of RM1.13 billion was 12% higher than the previous quarter, and 29.8% higher than the 2010’s 4Q net profit of RM873 million. YoY, the bank’s revenue was 2.1% higher at RM12.12 billion. Net interest income grew by 3%, while non-interest income was up only 0.3%.

“Last year’s non-interest revenue was boosted by the sale on ex-Lippo bonds, which created a bigger base,” said Nazir.

CIMB Islamic Bank Bhd’s YoY pretax profit increased 10.9% to RM447 million as its products gained more ground. Total deposits grew 28.9% to RM29.2 billion.

Bank CIMB Niaga, its Indonesian operations, reported a FY11 net profit of 3.17 trillion rupiah (RM1.06 billion), a 24.6% growth YoY, on the back of strong loans growth.

“We expect CIMB Niaga to continue its high growth rates in line with robust Indonesian markets. The Indonesian economy is expected to grow around 6%,” said Nazir.

CIMB Thai announced a FY11 net profit of 1.32 billion baht (RM131.21 million), a 58.8% improvement from the 829 million baht recorded in the previous year.

The Thai bank enjoyed a windfall gain of one billion baht in the 4Q, being the share of recoveries from legacy bad loans managed by Thai Asset Management Group, which was partly used to increase provisons following the flood.

On its outlook for 2012, Nazir said the bank is “cautiously optimistic” and an ROE target of 16.4% has been set for the year.

“I think 2012 could surprise on the upside as most of the downside risks are already quite visible. We believe that recent changes to our business model and processes have made us more competitive in our regional wholesale business, and our 2012 deal pipeline is very good,” he said.

Despite the anticipated slower credit growth environment for retail loans and softening in traditional areas like mortgages, Nazir said CIMB would build on last year’s growth in the consumer banking sector.

Meanwhile, commenting on the recent reports of CIMB’s bid to buy the Australian equity business of Britain-based Royal Bank of Scotland plc (RBS), Nazir confirmed that discussions are underway, but declined to comment further.

On the bank’s proposed acquisition of Bank of Commerce in the Philippines, he said CIMB hopes to complete the deal within next month. The Philippine central bank has a 60% cap on foreign ownership of banks.