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Reports Malaysia

Malaysia stock market and companies daily report (September 01, 2014)

September 1, 2014, Monday, 05:12 GMT | 01:12 EST | 08:42 IST | 11:12 SGT
Contributed by Shares Investment

CIMB 2Q14 Earnings Falls 9.9%

- CIMB Group Holdings posted a 1 percent dip in net revenue from RM3.44 billion in 2Q13 to RM3.4 billion in 2Q14. However, as a result of tough conditions in Indonesia and the sharply weaker rupiah, CIMB’s net profit fell 9.9 percent to RM949.9 million in 2Q14.

- Low financial market volumes and volatility across the region led to weaker investment banking and treasury businesses.

- However, excluding Indonesia and an exceptional gain last year, the bank’s profit before tax was up 5.9 percent year-on-year, due to strong performance of its Singapore, Malaysia and Thai operations.

Significance: Going forward, CIMB said that its main challenge remains in Indonesia, in view of the prevailing economic and liquidity environment there.

FGV Offers RM628m For Singapore’s Asian Plantations

- Felda Global Ventures Holdings (FGV) has announced the proposed acquisition of Singapore-incorporated plantation company Asian Plantations (APL) for GBP120 million (approximately RM628 million).

- APL is listed on the alternative investment market (AIM) on the London Stock Exchange and owns 24,622 hectares of palm oil plantations through its five wholly-owned estates in Sarawak.

- The offer price, based on GBP2.20 per share, represents a 5.4 percent premium over the weighted average price on AIM for the one-month period prior to 29 August 2014, when the offer was made.

Significance: FGV’s management states that the acquisition complements the group’s long-term expansion strategy and believes that APL’s strong operational performance and high-quality estates will bolster the group’s lead in sustainable palm oil production.

Sime Darby’s FY14 Earnings Slip 9%

- For the financial year ended 30 June, Sime Darby registered a 4.8 percent decline in revenue to RM43.9 billion, on the back of weaker contributions from its plantation, industrial, motors and energy and utilities segments.

- Poorer segment results, coupled with lower profit from discontinued operations resulted in FY14’s net profit falling 9.4 percent to RM3.4 billion.

- Management attributed the lower earnings to a challenging global business environment and pointed out that income from its plantation segment surged in 4Q14, due to encouraging crude oil prices, which have been sliding since then.

Significance: Sime Darby’s management expects the group’s businesses to continue to be affected by weak commodity prices and a volatile foreign exchange environment, as the global economy continues to remain challenging. Despite the challenges, the group’s performance for the coming year is expected to be satisfactory.