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Reports Malaysia

Malaysia stock market and companies daily report (June 13, 2014)

June 13, 2014, Friday, 05:56 GMT | 00:56 EST | 10:26 IST | 12:56 SGT
Contributed by Shares Investment

Gadang Secures RM350m Petronas RAPID Contract

- Gadang Holdings has clinched a RM350 million project from Petroliam Nasional (Petronas) for works on the planned Refinery and Petrochemical Integrated Development (RAPID) – Package 18C, in Johor Bahru, Malaysia.

- Gadang’s subsidiary, Gadang Engineering (M), will provide site preparation works for the project.

- The contract commenced on 12 June and is expected to be completed by 30 September 2015.

Significance: The project is expected to contribute positively to Gadang’s FY15 and FY16 performances. Earnings visibility for the company is intact with outstanding orderbook of over RM1 billion.

Metal Reclamation Disposes Manufacturing Rights And Eco Technology

- Metal Reclamation (Industries), a subsidiary of Metal Reclamation, has agreed to sell its manufacturing rights and eco technology to Green Lead Industries for RM160 million.

- The rights are for the setup of an environmentally safe and zero discharge lead smelting and refinery plants while the technology is the know-how for the extraction, refining and manufacturing of the lead products.

- Metal Reclamation will net an estimated disposal gain of RM158 million which will be used to reduce its bank borrowings, other payables as well as finance working capital.

Significance: The proposed disposal provides Metal Reclamation an opportunity to realise the commercial value of the aforementioned rights and technology.

Mesiniaga Bags RM90m Telekom Deal

- Mesiniaga was awarded a RM90 million five-year contract from Telekom Malaysia.

- The contract is for the supply, delivery, installation, testing, commissioning, post acceptance maintenance and support services of the new internet protocol core and service edge systems.

- In its latest fiscal year, Mesiniaga posted revenue and losses of RM281 million and RM7.6 million respectively, as higher cost incurred from certain delayed projects and unfavourable foreign exchange rates eroded profitability.

Significance: Although the win is expected to contribute positively to Mesiniaga’s bottom line over the duration of the contract, management has shared that it is unlikely to affect its dividend policy for FY14.