Global Oriental To Record RM85m Net Gain From Land Sale
Global Oriental expects to record net gain of RM85.2 million from the sale of 15.6 acres of leasehold land in Seri Kembangan, Selangor to Singapore incorporated Qingdao Investment for RM142.4 million.
The indicative market value of the land is RM136 million and the sale consideration represents a 4.7 percent premium to the quoted value.
The group said that based on the current conditionally approved development order, the estimated gross development value for the two land parcels was RM740 million whilst the estimated gross development costs for the lands was RM557 million.
Significance: The proposed disposal represents a good opportunity for Global Oriental to crystalise capital appreciation of the lands for cash and the group notes that the proceeds would be used to pare down its borrowings and carrying projects.
Petronas Gas 3Q14 Earnings Jump 10%
For the third quarter ended 30 September, Petronas Gas recorded a 10.2 percent increase in net profit to RM418.6 million, in line with a 9.8 percent rise in top line to RM1.1 billion.
The better performance was attributable to higher utilities revenue as a result of a higher off-take by customers, upward revision of electricity tariff, higher gas transportation and gas processing revenue.
However, net profit for the nine-month period fell 24.5 percent to RM1.3 billion mainly due to the recognition of deferred tax assets arising from the investment tax allowance. Excluding the impact of deferred tax, profit for the period expanded by RM220.9 million.
Significance: Petronas Gas has announced an interim dividend of RM0.20 per share and expects to continue to deliver sustainable and steady returns, with the regasification segment contributing positively to the group’s bottom line through its full year of operations.
Sarawak Cable Eyes Better Margins
Sarawak Cable is eyeing better margins and more jobs in Peninsular Malaysia to strengthen the group’s footing, with plans to improve the margins of the two proposed acquisitions of Universal Cable (M) and Leader Cable Industry by focussing on medium- and high-voltage cables, which brought about higher margins, according to AmResearch.
The research house noted that the consolidations of operations in Peninsular Malaysia with a combined market share of 50 percent would be a beneficial component for the group, as it would secure more transmission jobs.
While earnings growth is expected to soften this year, AmResearch said that contributions from the 500 kilovolts job coupled with the RM943 million Balingian coal-fired power plant would come in strongly in FY15F and FY16F.
Significance: The research house expects a profit before tax margin of 3 percent for the cable division compared with the acquired companies’ margin of 2 percent and is maintaining its ‘Buy’ call on the counter with a fair value of RM1.70
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