Investor Relation

Pintaras Jaya, IOI Corp, Prestariang, Ibraco, Guan Chong and BP Plastics

KUALA LUMPUR (Nov 18): Based on corporate announcements and news flow today, stocks in focus on Monday (Nov 21) may include Pintaras Jaya Bhd, IOI Corp Bhd, Prestariang Bhd, Ibraco Bhd, Guan Chong Bhd and BP Plastics Holding Bhd.

Piling and civil engineering services provider Pintaras Jaya Bhd saw its net profit for the first quarter ended Sept 30, 2016 (1QFY17) rise by close to double to RM13.2 million or 8.1 sen per share from RM6.72 million or 4.1 sen a year ago.

The group attributed the higher profitability to increased construction activities and higher progress profits recognised from ongoing projects, which have advanced beyond the initial stages of implementation.

Revenue for 1QFY17 also grew by 67.03% to RM59.73 million from RM35.76 million a year earlier.

On the outlook, the group is expecting its construction division to perform well for the rest of FY17 based on its current order book and “satisfactory” tender book value.
“Despite the slowdown in the property market, the local construction industry outlook remains bright for the coming year as the government continues to focus on major
infrastructure projects under Budget 2017,” it said.

Projects such as the Mass Rapid Transport (MRT) Line 2, Light Rail Transport (LRT) Line 3, Damansara-Shah Alam Highway (DASH), Sungai Besi-Ulu Klang Elevated Expressway (SUKE) and Pan Borneo Highway will involve substantial substructure works and certainly contribute significantly to the overall strength of the piling industry, it added.

It also said new mega projects in the pipeline such as Bandar Malaysia, Rubber Research Institute, MRT Line 3, High Speed Rail and the East Coast Rail Line projects are in queue to be implemented.

On another note, the group cited human resource as the most critical challenge, as recruitment at all levels remains difficult. “Wage inflation issues continue to escalate. Our manufacturing business continues to slow down and selling prices are falling due to intense competition and the generally subdued sentiment in the market,” it lamented.

IOI Corp Bhd returned to the black after posting its first quarter net profit of RM104.8 million from a net loss of RM744.4 million a year earlier, on higher income from its upstream and downstream oil palm operations.

Significantly lower foreign exchange (forex) loss on its foreign currency-based borrowings also supported profit in the first quarter ended Sept 30, 2016 (1QFY17), it said.

Its 1QFY17 revenue nudged higher from RM3.09 billion to RM3.29 billion. Its latest income statement showed net forex loss on foreign currency-denominated borrowings stood at RM172 million against RM853.9 million a year earlier.

For 1QFY17, the group posted a profit before taxation (PBT) of RM189.2 million versus loss before taxation of RM690.6 million reported for 1QFY16. The higher PBT was due mainly to higher contribution from all segments and lower net foreign currency translation loss on foreign currency denominated borrowings.

“The (upstream) plantation profit increased by 57% to RM346.6 million for 1QFY17 compared with RM221.4 million reported for 1QFY16. The higher profit reported is due mainly to higher CPO (crude palm oil) and PK (palm kernel) prices realised despite lower FFB (fresh fruit bunch) production,” IOI Corp said.

IOI Corp said that despite low FFB yield, it expects its plantation segment to be supported by prevailing high CPO and PK prices.

The government had given its nod to Prestariang Bhd to implement a government-led border transformation programme at an estimated cost of RM3.54 billion.

Prestariang said it received a letter dated Nov 15, 2016, from the Home Affairs Ministry to confirm that the Cabinet has given the green light for the company to implement ‘Sistem Kawalan & Imigresen Nasional’ (SKIN).

“SKIN will be implemented by way of a public private partnership through the build, operate, maintain and transfer method. The concession is for a period of 15 years and will consist of three years of build and deployment phase and 12 years of maintenance and technical operation phase,” it said.

Payment to the company will begin once the system is fully commissioned after three years, with an average annual payment of RM294.7 million from year four to year 15 during the maintenance and technical operation phase.

“SKIN is a comprehensive and integrated technology platform to modernise the core applications and infrastructure of the national immigration system with the objective to enhance national border security,” Prestariang said.

Property developer Ibraco Bhd’s net profit in the third quarter ended Sept 30, 2016 (3QFY16) slipped 61.1% to RM4.36 million, from RM11.2 million a year earlier, as revenue retreated due to a change in product mix.

Its latest earnings were also affected by the variance in sales and completion status of projects during the quarter compared with a year ago.

Revenue too declined 46.6% to RM60.76 million, from RM32.43 million a year earlier.

Looking ahead, the group plans to launch more projects this year and beyond, comprising mainly residential and commercial properties.

Guan Chong Bhd’s net profit for the third quarter ended Sept 30, 2016 (3QFY16) contracted 28.6% to RM15.48 million from RM21.69 million a year earlier, dragged down by lower net gain on foreign exchange arising from the weakening of the ringgit against the US dollar and British pound.

Revenue slipped 15.7% to RM597.51 million from RM708.83 million following a decrease in sales volume of cocoa butter and cake.

In spite of this, the group announced a first interim single-tier dividend of 1.5 sen per share for FY16, payable on Jan 4, 2017.

As the cocoa processing industry is, to a certain extent, affected by the seasonal pattern of the consumption of cocoa-based products within a year, the group anticipated a challenging business environment for the rest of FY16.

“While the cocoa bean prices continue to be volatile, the demand for cocoa solids remains uncertain,” it said.

However, the group will continue to focus on turnaround efforts which include reducing inventory level, exploring new markets for its wide range of cocoa ingredients, growing industrial chocolate business and optimising production according to market conditions.

Due to higher costs of sales as well as increased selling and marketing expenses, BP Plastics Holding Bhd saw its net profit in the third quarter for the financial year ended Sept 30, 2016 (3QFY16) decline by 48.9% to RM3.05 million from RM5.95 million a year earlier.

In 3QFY16, the group incurred RM70.81 million in sales costs, 20.2% higher than the RM58.9 million in 3QFY15. Meanwhile, its selling and marketing expenses for the current quarter amounted to RM2.51 million, which was 18% higher than the RM2.13 million it spent a year earlier.

Although revenue in the current quarter was higher at RM79.4 million, up 16% from RM68.4 million in 3QFY15, the increase in sales costs dragged down its current net profit.

BP Plastics also declared a single-tier third interim dividend of two sen per share, which will be payable on Dec 22, 2016.

BP Plastics’ net profit for the cumulative nine months of FY16 (9MFY16) was slightly higher by 1.7% at RM14.02 million compared with RM13.78 million in 9MFY15 due to higher effective tax rate for the current period (from 23% in 9MFY15 to 28.44% in 9MFY16) arising from additional tax expenses as a result of the reversal of the Automation Capital Allowance.

Higher sales volume from its export markets, which amounted to RM194.1 million, 22.3% higher than RM158.69 million a year ago, boosted its revenue in 9MFY16, which grew 20.3% to RM243.57 million compared with 9MFY15’s revenue of RM202.39 million.

Moving forward, the group will actively scout for opportunities for machine and product innovations, and implement strategies to achieve higher export sales amid the sluggish global economic recovery, extreme volatility in the forex rate as well as the weakening domestic market and intense competition within the industry.

The group has also recently acquired a brand new cast stretch film machine and said that its commissioning is on schedule.