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Reports Malaysia

Malaysia stock market and companies daily report (March 21, 2014)

March 21, 2014, Friday, 05:46 GMT | 02:46 EST | 11:16 IST | 13:46 SGT
Contributed by Shares Investment

SapuraKencana In RM16.5b Re-Financing Deal

- SapuraKencana Petroleum signed a RM16.5 billion refinancing club deal involving local, regional and international banks.

- The refinancing programme was put in place to replace and streamline facilities that were inherited following the merger of SapuraCrest Petroleum and Kencana Petroleum in early 2012. It will also finance two recent acquisitions including the Seadrill tender-rig business which has been renamed SapuraKencana Drilling and the purchase of Newfield Malaysia Holding.

- Notably, the interest from the lending institutions exceeded the RM16.5 billion required by the group. Also, about 70 percent of the borrowings are in US dollars which provide a natural hedge against businesses SapuraKencana is engaged in.

Significance: SapuraKencana noted that 80 percent of its projected earnings before interest, taxes, depreciation and amortisation for the next three years is already secured by contracts and the company’s ability to demonstrate strong and visible earnings was a key contributor to the overwhelming interest by the banks.

Top Glove Slows Expansion On Oversupply

- Top Glove Corporation is planning to slow its production capacity expansion, in order to stem the fall in the average selling price of gloves due to the oversupply in the market.

- The oversupply, coupled with intense competition within Malaysia and the region like Thailand, Indonesia and Vietnam, and raising their glove prices by RM0.20 due to the increase in electricity rates have also weighed on Top Glove’s financial performance.

- Top Glove has 23 glove factories and an annual capacity of 41.3 billion pieces. By end 2014, the company is expected to add another factory, raising capacity to 43.5 billion.

Significance: With the higher glove prices, Top Glove did not discount the possibility of buyers switching to rival glove producers in other countries. Nonetheless, the company is optimistic on its future performance, in anticipation of registering entire income from privatised Medi-Flex and narrowing losses from China operations.

Johor Corp Pre-Tax Profit Exceeds RM1b Mark

- Johor Corporation reported a strong full year results for the year ended 31 December 2013, with pre-tax profit doubling to RM1.4 billion, exceeding the RM1 billion mark for the first time.

- FY13 revenue grew to RM6.6 billion and this did not take into account the quick service restaurant sector that was equity accounted following the acquisition of QSR Brands.

- The group said the better result was due to its strategic business transformation plan that saw growth in its plantation, healthcare and property development segments which contributed 85 percent to its profit.

Significance: Johor Corp is confident on maintaining such growth momentum and aiming to reduce its gearing to zero by 2022. The business prospects is underpinned by strong business fundamentals, higher fresh fruit bunches yield and progressive replanting that has increased matured oil palm areas.