KUALA LUMPUR (Aug 28): Based on corporate announcements and news flow today, companies that in focus on Tuesday (Sept 1) may include: CIMB Group Holdings Bhd, Public Bank Bhd, RHB Bank Bhd, Hong Leong Bank Bhd, Hong Leong Financial Group Bhd, Malaysian Pacific Industries Bhd, YTL Corp Bhd, DRB-Hicom Bhd, Top Glove Corp Bhd, Datasonic Group Bhd, Bumi Armada Bhd and Ta Ann Holdings Bhd.
CIMB Group Holdings Bhd is expecting a margin compression of 10 to 15 basis points (bps) on net interest margin (NIM) for the financial year ending Dec 30, 2020 (FY20), in contrast to its earlier guidance of four bps. The more severe NIM compression is the result of an RM281 million modification loss and three overnight policy rate (OPR) cuts by Bank Negara Malaysia this year, said CIMB group chief financial officer Khairul Rifaie.
Meanwhile, it is expecting its provisions for loans to remain elevated — with a 120 to 140 basis points (bps) guidance — for FY20. Its group CEO Datuk Abdul Rahman Ahmad attributed this to the additional provisions to account from macroeconomic factors under MFRS9, and impairments, especially for accounts outside Malaysia.
The group reported that its net profit fell 82% to RM277.08 million in the second quarter ended June 30, 2020 (2QFY20) from RM1.51 billion a year ago, as it was adversely impacted by the challenging economic environment as well as the modification loss. Quarterly revenue fell 14% year-on-year to RM3.87 billion from RM4.47 billion previously.
It declared no dividends for the quarter, though it said it remains committed to its dividend payout policy of 40% to 60% of its net profit to shareholders.
Public Bank Bhd, RHB Bank Bhd and Hong Leong Bank Bhd, which reported their results today, also delivered weaker earnings, primarily due to the modification loss.
Public Bank’s net profit for the quarter ended June 30 (2QFY20) fell 24.84% year-on-year to RM1 billion from RM1.33 billion last year, as it booked in a modification loss of RM498 million arising from the loan moratorium. And for the first time since FY05, it declared no interim dividend for the period, as opposed to 33 sen per share in 2QFY19. Overall, quarterly group operating revenue slid 15.35% to RM4.74 billion from RM5.6 billion.
RHB Bank’s net profit came in at RM400.77 million for the second quarter ended June 30, 2020 (2QFY20), down 34.9% from RM615.41 million a year ago, as it booked in a modification loss of RM392.39 million, and higher allowances for credit losses on loans. Group revenue slipped 4.4% year-on-year (y-o-y) to RM3.27 billion from RM3.42 billion. It also declared no dividend for the quarter.
Hong Leong Bank Bhd, on the other hand, posted a 10.53% y-o-y drop in net profit to RM569.42 million for its fourth quarter ended June 30, 2020 (4QFY20) from RM636.45 million, despite revenue growing to RM1.2 billion from RM1.17 billion. The weaker earnings were mainly due to higher allowance for impairment losses on loans, as well as other assets. It proposed a final single-tier dividend of 20 sen per share for FY20.
Meanwhile, its parent Hong Leong Financial Group Bhd reported a 12.04% y-o-y increase in net profit for the same quarter to RM525.14 million from RM468.7 million, on higher contributions from its insurance, investment banking and stockbroking segments. Group revenue rose to RM1.43 billion from RM1.34 billion. It has proposed a final dividend of 25 sen per share.
Malaysian Pacific Industries Bhd (MPI), also a member of Hong Leong group, has delivered a decent set of earnings with a record high annual revenue for the financial year ended June 30, 2020 (FY20). This comes as it reported a net profit of RM49.04 million for the fourth quarter ended June 30 (4QFY20), up 63% y-o-y from RM30.05 million, as revenue grew 17% to RM405.45 million from RM345.9 million.
The group’s annual profit grew to RM178.75 million from RM160 million a year ago, as revenue expanded by about 52% to its highest ever of RM1.564 billion from RM1.487 billion previously.
YTL Corp Bhd posted a wider net loss of RM252.23 million for the fourth quarter ended June 30, 2020 (4QFY20), from RM13.82 million a year earlier, as its businesses were hit by the COVID-19 pandemic. Quarterly revenue sank 30.77% to RM3.52 million from RM5.09 million.
DRB-Hicom Bhd’s net loss widened to RM306.08 million for the second quarter ended June 30, 2020 (2QFY20) from RM173.27 million for the preceding quarter, as operating loss more than tripled to RM216.96 million from RM62.09 million. This was mainly due to increased losses in the automotive segment and weaker property segment profit, which was slightly offset by better performance in the services and investment holding segments.
Quarterly revenue fell 26.74% to RM2 billion from RM2.74 billion in the preceding quarter. This was DRB-Hicom’s weakest quarterly top line since the quarter ended Dec 31, 2011 when it reported RM1.69 billion revenue.
Separately, DRB-Hicom announced that Petroliam Nasional Bhd’s (Petronas) former president and chief executive officer Tan Sri Wan Zulkiflee Wan Ariffin has been appointed its chairman, with the appointment to take effect on Sept 1. Wan Zulkiflee is taking over the post from Datuk Mohammad Zainal Shaari, who has resigned.
Top Glove Corp Bhd said today that the independent audit over its labour practices has been completed, as part of its ongoing efforts to resolve the ban on exports of its products to the US. The ban, which has lasted more than six weeks, accounted for 12.5% of Top Glove’s total sales. The US is a major market accounting for 25% of group sales volume. “The audit report is expected to be available within 10 days, for onward submission to the US CBP,” said Top Glove in a statement today.
Datasonic Group Bhd's net profit for the first financial quarter ended June 30, 2020 (1QFY21) slumped by 66% year-on-year to RM4.77 million, as its main income-generating business — the supply of passports to the Immigration Department — was halted by the implementation of the Movement Control Order (MCO) to curb the COVID-19 outbreak. Quarterly revenue fell by a third to RM39.39 million from RM58.31 million.
Nevertheless, the e-government service provider's board has declared an interim dividend of 0.5 sen per share, which is more than double Datasonic’s earnings per share of 0.24 sen during the quarter under review, according to the group's filing with Bursa Malaysia.
Bumi Armada Bhd's net profit for the second quarter (2Q) ended June 30, 2020 rose to RM119.77 million from RM78.21 million recorded in the same period last year, as revenue grew to RM606.80 million from RM535.6 million — mainly contributed by the floating, production and offloading (FPO) operations.
Timber and oil palm player Ta Ann Holdings Bhd’s net profit for the second quarter ended June 30, 2020 (2QFY20) jumped 158% year-on-year, lifted by higher average selling prices of crude palm oil (CPO) and fresh fruit bunch (FFB) production. Quarterly net profit was higher at RM13.26 million or 3.01 sen earnings per share compared with RM5.14 million or 1.17 sen per share a year ago. Revenue grew 15% to RM248.7 million from RM216 million.
For the cumulative six months ended June 30, its net profit soared 77.8% to RM23.5 million from RM13.22 million a year ago, while revenue increased almost 27% to RM501.31 million versus RM394.93 million.