IOI Corp, AWC, AAX, S P Setia, Carlsberg Brewery, MISC, Kossan, DKSH and WCT

KUALA LUMPUR (Aug 23): Based on corporate announcements and news flow today, companies that may be in focus on Wednesday Aug 24 could include: IOI Corp Bhd, AWC Bhd, AirAsia X Bhd (AAX), S P Setia Bhd, Carlsberg Brewery Malaysia Bhd, MISC Bhd, Kossan Rubber Industries Bhd, DKSH Holdings (M) Bhd and WCT Holdings Bhd.

IOI Corp Bhd slipped back into the red for its fourth quarter ended June 30, 2016 (4QFY16), with a net loss of RM59.0 million, compared with a net profit of RM112.7 million last year. Revenue for 4QFY16 fell 3.9% to RM2.82 billion, from RM2.93 billion a year earlier.

In a filing with Bursa Malaysia today, IOI Corp said the 4QFY16 loss was due to lower contribution from its resource-based manufacturing segment.

The segment suffered a loss of RM58.5 million, as compared to a profit of RM99.1 million in 4QFY15, mainly due to a fair value loss on derivative financial instruments of RM121.9 million, which are primarily trade-related foreign exchange forward contracts.

The segment also saw lower margins derived from its oleochemicals sub-segment as a result of high palm kernel raw material cost, and partly due to lower contribution from specialty oils and fats sub-segment, arising from the group’s Roundtable on Sustainable Palm Oil (RSPO) certification suspension.

For the full financial year (FY16), IOI Corp’s net profit of RM629.7 million was more than 12 times FY15’s RM51.9 million, due to a lower net foreign currency translation loss on foreign currency denominated borrowings and higher contribution from resource-based manufacturing segments.

Revenue was 1.7% higher at RM11.74 billion, compared with RM11.54 billion for FY15.

AWC Bhd’s net profit for the fourth quarter ended June 30, 2016 (4QFY16) nearly tripled to RM6.49 million, from RM2.19 million a year earlier, on higher contributions from its facilities, environment and engineering divisions.

Revenue more than doubled to RM76 million, it said in a filing with Bursa Malaysia.

The group has recommended a final single-tier dividend of one sen per share for FY16. The total pay-out for the year is 2.5 sen a share.

For the full FY16, net profit grew 113% to RM17.24 million, from RM8.08 million in FY15. Revenue jumped nearly 95% to RM249.34 million, from RM128.02 million.

“The increase in revenue over the two financial years was due to the securing and commencement of new contracts, including the concession renewal,” it said.

AWC said overall prospects for the entire group remain strong, and that it expects positive contributions from the facilities, environment and engineering divisions.

AirAsia X Bhd (AAX) reported a net profit of RM1.02 million for the second quarter ended June 30, 2016 (2QFY16) — its third consecutive quarter to be in the black. This time last year, it made a net loss of RM132.94 million a year ago.

This was due to higher revenue, which grew by 35.2% to RM883.16 million in 2QFY16, from RM653.03 million last year. It also attributed the profitability to lower fuel cost, AAX said in its Bursa Malaysia filing today.

Cumulatively, AAX booked a net profit of RM180.51 million for the first half of FY16 (1HFY16), against a net loss of RM258.86 million in the previous corresponding period. Revenue grew almost 30% to RM1.85 billion, from RM1.43 billion in 1HFY15.

Based on the current forward booking trend, AAX said the number of passengers to be carried in 3QFY16 remains encouraging, while forward loads and average fares are also better than the previous year.

S P Setia Bhd has lowered its property sales target figure to RM3.5 billion, three months after expressing confidence achieving its RM4 billion target for the current year.

President and chief executive officer Datuk Khor Chap Jen today cited global uncertainty, especially in the aftermath of Brexit, and continued weak sentiment in the Malaysian property market, for the downward revision.

Khor said the group’s prospects remain positive, with total unbilled sales of RM8.2 billion, anchored by 29 ongoing projects and effective remaining land bank of 3,805 acres, with a gross development value (GDV) of RM71.5 billion as of June 30.

S P Setia reported a net profit of RM125.78 million for the second quarter ended June 30, 2016 (2QFY16), on the back of a revenue of RM1.01 billion, according to its Bursa Malaysia filing.

For the first half of the year (1HFY16), the group reported a net profit of RM249.17 million, on revenue of RM1.92 billion.

The group did not provide comparison figures, as it changed its financial year end from Oct 31 to Dec 31, and made up its financial statements for the 14 months period ended Dec 31, 2015.

The group has proposed an interim dividend of four sen per share, to be paid on a date to be determined later.

S P Setia said for the seven-month period ended July 31, the group achieved sales of RM1.35 billion, with RM1.11 billion sales secured for 1HFY16.

“The sales secured are largely from central region with RM856 million; southern, northern and eastern region combined with RM140 million; and international region with RM109 million.

Khor said S P Setia is confident that its upcoming list of launches for the second half of the year will have good responses. They range from affordable housing to exclusive niche developments.

Carlsberg Brewery Malaysia Bhd’s net profit for the second quarter ended June 30 (2QFY16) surged by 62% to RM51.36 million, from RM31.71 million in the previous corresponding quarter, partly due to the one-time impairment loss of RM12.5 million a year ago, relating to the Luen Heng F&B Sdn Bhd (LHFB) divestment.

The brewery said after the adjustment for LHFB divestment, its quarterly operating profit grew by 16.3%, attributed to robust efficiency initiatives.

The group’s revenue dropped by 1.62% to RM395.83 million in 2QFY16, according to the announcement to Bursa Malaysia.

The board has declared a single-tier interim dividend of five sen per share, which will go ex on Sept 21.

For the first six month period ended June 30 (1HFY16), the group’s net profit grew by 44.8% to RM114.30 million, from RM78.94 million recorded in 1HFY15, mainly due to higher revenue and effective cost management.

Carlsberg’s cumulative revenue edged up by 2.38% to RM851.55 million in 1HFY16, against RM831.78 million in 1HFY15. Excluding the LHFB divestment, the organic growth for its revenue was at 10.3%.

MISC Bhd's wholly-owned subsidiary MISC Offshore Floating Terminals (L) Ltd (MOFT) has been awarded a contract valued at about US$230 million (RM927.5 million) for the lease and operation of a floating storage and offloading vessel (FSO) by Chevron Offshore (Thailand) Ltd (COTL).

In a filing to Bursa Malaysia today, the shipping group said the FSO is part of Chevron's FSO Benchamas 2 Project in the Gulf of Thailand.

"The contract, valued at approximately US$230 million, is for a duration of 10 years, with Chevron having the right to extend for up to five extensions of one year each.

The scope of work under the contract includes engineering, procurement, construction, installation, commissioning, lease and operations of the FSO Benchamas 2 Project, which is expected to commence operations by the second quarter of 2018.

Kossan Rubber Industries Bhd's net profit for the second financial quarter ended June 30, 2016 (2QFY16) dropped by 13.6% to RM40.97 million, from RM47.44 million a year ago, as a result of persistent industry-wide selling pressures.

In a filing to Bursa Malaysia today, Kossan also attributed profitability decline to loss of production output, as a consequence of scheduled revamp works in one of its plants, besides higher natural latex prices, increased natural gas cost and higher labour cost, due to an industry-wide labour shortage.

Revenue for 2QFY16 came in 4.7% higher at RM403.77 million, compared with RM385.78 million a year ago, thanks to a 2.3% rise in quantity of gloves sold.

For 1HFY16, Kossan reported a marginal 0.7% slide in net profit to RM92.27 million, from RM92.89 million a year ago.

Revenue for 1HFY16, however, was 8.1% higher at RM816.05 million, compared with RM755.03 million a year ago, due to more gloves sold.

For the remaining quarters of FY16, Kossan said continued pricing pressure, as a consequence of sudden capacity surge within a short period of time, coupled with higher production cost, will continue to place the overall profitability of glove makers under pressure.

"The group is mindful and vigilant to these challenges and has since taken strategic moves to counter the situation," it said.

"The group will also focus on automation and lean process to reduce the redundancy in manpower," it added.

DKSH Holdings (M) Bhd's net profit for the second quarter ended June 30, 2016 (2QFY16) doubled to RM20.4 million or 12.95 sen per share, from RM10 million or 6.35 sen per share a year earlier.

This was primarily due to growth in revenues on non-telecommunications clients, and stable and lower operating costs relative to revenues, the group said in a bourse filing today.

Revenue slipped 1.24% to RM1.35 billion, from RM1.37 billion in 2QFY15.

DKSH said net profit for the first half of FY16 (1HFY16) grew 42.46% to RM31.7 million or 20.1 sen per share, from RM22.2 million or 14.11 sen per share in 1HFY15. Revenue dipped 3.7% to RM2.68 billion, from RM2.8 billion.

On its prospects, DKSH said the market conditions are relatively stable.

"Costs remain stable and no major expenses or infrastructure upgrades are planned in 2016, as the infrastructure has now been put in place to support the growth currently being experienced.

"Revenues will continue to be below prior year, due to the change in telecommunications client; however, revenues for existing clients are expected to continue to grow," it said.

WCT Holdings Bhd made a 3.3% increase in its second quarter net profit to RM32.07 million, on higher revenue contribution from the local construction segment.

Revenue for the quarter ended June 30, 2016 (2QFY16) rose 37.6% to RM581.07 million, from RM422.31 million in 2QFY15, the group said in a filing to Bursa Malaysia.

For 1HFY16, WCT posted a 36.4% drop in net profit to RM40.9 million or 3.31 sen per share, compared with RM64.27 million or 5.82 sen per share for 1HFY15, due to unrealised foreign exchange losses.

Revenue came in 37.7% higher at RM1.07 billion, compared with RM773.93 million in 1HFY15, as a result of higher contribution from the local construction segment.
On its prospects, WCT said it is confident of achieving satisfactory results for FY16. Its outstanding order stood at RM4.3 billion.