KUALA LUMPUR (July 26): Based on corporate announcements and news flow today, stocks in focus tomorrow (July 28) may include: TNB, Maybank, Bertam Alliance, Caring Pharmacy, FGV, Tasek Corp, Pav REIT, Ancom, Zecon and Homertiz.
Tenaga Nasional Bhd’s (TNB) net profit for its third quarter ended May 31, 2017 shrank 15% to RM1.96 billion or 34.68 sen per share, from RM2.31 billion or 40.91 per share a year ago, mainly due to higher deferred tax expense.
Deferred taxation expense jumped to RM400 million, from RM22.1 million last year, as a result of higher asset capitalisation over its 2016 and 2017 financial years (FY16 and FY17) that was recognised in the quarter.
However, revenue for the quarter was up 3.5% to RM12.55 billion, from RM12.13 billion due to an under-recoverability in costs via the Imbalance Cost Pass-Through (ICPT) mechanism recognized in 3QFY17, compared with an over-recoverability of RM537.6 million recognised in 3QFY16.
The ICPT mechanism, a part of the wider regulatory reform called the Incentive Based Regulation, allows for TNB to be financially neutral from any variations in generation costs and fuel prices.
“The over-recoverability of the ICPT recognised during the current period of RM288.8 million is lower compared with the last corresponding period of RM1.93 billion,” TNB said.
Going forward, TNB said it expects unit electricity demand to grow in line with the projected gross domestic product (GDP) growth for the year, which was updated by the International Monetary Fund to 4.8%, from 4.5% on July 24.
Malayan Banking Bhd's (Maybank) Indonesia unit PT Bank Maybank Indonesia Tbk (Maybank Indonesia) posted a 16.3% year-on-year (y-o-y) rise in its profit after tax and minority interests (Patami) to 998.5 billion rupiah in the first six months ended June 30, 2017 from 858.4 billion rupiah, on overall improvement in its core banking business.
Net interest income rose 7% y-o-y to 3.8 trillion rupiah from 3.6 trillion rupiah, mainly due to the bank's discipline in loan pricing and active funding management.
Net interest margin improved to 5.3% in June 2017 compared with 5% in June 2016. Fee-based income grew 9.1% to 1.5 trillion rupiah from 1.3 trillion rupiah. "The increase in fee-based income was achieved from bancassurance, loan recovery, remittances, and other services provided by the bank," Maybank said.
Bertam Alliance Bhd’s unit Bertam Development Sdn Bhd (BDSB) has been served with a statutory notice, demanding for payment in the sum of RM4.57 million as at July 25 and continuing interest at the rate of 7.65% per annum on RM4.11 million from July 26 until full and final realisation of the total sum due.
If BDSB fails to pay R & C Cergas Teguh at the expiration of 21 days from the date of the statutory notice served, BDSB will be deemed pursuant to Section 466(1)(a) of the Companies Act 2016 and the winding up proceedings will be commenced against BDSB.
Bertam Alliance announced it will defend the proceedings and will contest any winding-up proceedings that may be initiated. BDSB is a major subsidiary of Bertam Alliance and the group has invested about RM70 million into the company.
Caring Pharmacy Group Bhd's net profit for the fourth quarter of financial year ended May 31, 2017 grew by 59.2% to RM4.36 million or two sen per share from RM2.74 million or 1.26 sen per share in the corresponding quarter a year ago, mainly contributed by higher sales generated from existing outlets.
This was in line with the group's revenue, which increased by 10.3% to RM119.5 million compared with RM108.3 million previously.
The higher revenue was mainly contributed by higher sales generated from existing outlets due to aggressive and extensive promotional campaigns launched during FY17.
"During the quarter under review, we have established addition of four complex outlets, closed down one high street outlet and one specialty retail outlet. As of May 31, 2017, we have a total of 107 community pharmacies," it said.
Caring proposed a final dividend of three sen per share, tax exempt under the single-tier system, in respect of FY17, subject to shareholders' approval at the group's annual general meeting.
Felda Global Ventures Holdings Bhd (FGV) will open employment opportunities to locals, especially new generation settlers, for a career in the plantation industry in an effort to reduce dependency on foreign workers.
FGV officer-in-charge Datuk Khairil Anuar Aziz said the group is highly dependent on foreign labour with more than 35,000 foreign employees across the country and is in need of more workers to ensure daily operations run smoothly.
Cement producer Tasek Corp Bhd’s net profit for the second quarter ended June 30, 2017 plunged by 91.7% down to RM1.49 million from RM17.96 million a year earlier, due mainly to lower net revenue for its cement segment.
The group said its revenue dipped 22.3% to RM134.98 million from RM173.74 million due to lower demand for cement in the domestic market and lower average net pricing for both cement and ready-mixed concrete.
The group also proposed an interim dividend of 20 sen per share, payable on Sept 8.
Pavilion Real Estate Investment Trust (Pavilion REIT), which inked an agreement to buy Pavilion Elite Mall for RM580 million, is planning a private placement to raise RM370.6 million to help fund the purchase.
It is buying Pavilion Elite Mall from Urusharta (KL) Sdn Bhd, whose ultimate shareholders are Tan Sri Lim Siew Choon and Qatar Holdings LLC — both major stakeholders in Pavilion REIT.
Under the placement exercise, it will be issuing 218 million new units via a book-building exercise.
The placement represents 7.2% of Pavilion REIT’s current outstanding shares totalling nearly 3.03 billion. It will be issued to third party investors at an indicative price of RM1.70 apiece.
The trust will also borrow RM225.9 million to fund the balance consideration, together with an estimated RM16.5 million for expenses relating to the acquisition and placement exercise.
Separately, Pavilion REIT reports that its net property income slid 5.78% year-on-year in its second quarter ended June 30, 2017 to RM76.72 million from RM81.43 million — its first quarterly decline since the third quarter of 2015.
Similarly, distribution per unit (DPU) was lower at 1.94 sen apiece representing a yield of 4.54%, compared with 2.06 sen in the same quarter last year. This brings its half-year FY17 distribution to 3.96 sen, which it will pay on Sept 6.
Meanwhile, revenue in the period rose a marginal 1.91% to RM120.26 million, from RM118.01 million previously, mainly thanks to higher percentage rent — but a RM7 million increase in operating expenses for maintenance purposes pared gains.
Ancom Bhd continued its financial turnaround with a net profit of RM3.89 million in its fourth quarter ended May 31, 2017, compared with a net loss of RM5.19 million a year earlier, due to higher revenue from its agricultural and industrial chemicals sector and media segment.
Quarterly revenue was up 28.23% at RM477.48 million, compared with RM372.35 million previously.
Zecon Bhd has proposed a private placement that will raise about RM6.5 million as interim funding for the group's working capital pending the completion of a proposed rights issue of redeemable convertible unsecured loan stocks (RCULS).
"The proposed private placement is expected to provide additional capital to the Zecon Group on an expeditious basis, given the relatively short timeframe for completion of the proposed private placement, for the group's business operations and at the same time increase the flexibility of the Zecon Group's cash flow management," it said.
The RCULS would see the group raise minimum proceeds of RM24.9 million for its working capital requirements. The exercise is expected to be completed in the fourth quarter of 2017.
The board is of the opinion that the proposed private placement is the most appropriate avenue of fund raising at this juncture as it would enable the company to raise funds expeditiously without incurring interest costs compared to bank borrowings.
Homeritz Corp Bhd's net profit for the third quarter ended May 31, 2017 grew 20.7% to RM7.82 million or 2.61 sen per share from RM6.47 million or 2.16 sen per share in the corresponding quarter a year ago.
The group's revenue also rose 10.2% to RM44.6 million from RM40.5 million, mainly attributed to the strengthening of the US dollar.
The group declared a second interim single tier tax-exempt dividend of 5%, equivalent to one sen per share. The ex date is Aug 28, and payment date is Sept 29.