Muhibbah wins RM1b Aussie job

Muhibbah Engineering (M) Bhd says its 50:50 joint venture with Monadelphous Group Ltd has won a RM1.05 billion contract in Australia.

Monadelphous Muhibbah Marine JV will build approach jetty and ship berth associated with the Wiggins Island Coal Export Terminal Pty Ltd (WICET)'s project at Gladstone in Queensland.

"The MMM joint venture brings together Muhibbah's global expertise in the delivery of marine and port construction works and Monadelphous's expertise in the civil construction of large-scale projects for Australian resources customers.

"This also marks another new era for Muhibbah Group' sexpansion of marine-related business into advanced countries such as Australia," it said in a filing to Bursa Malaysia yesterday.

The job includes building offshore plant and infrastructure such as a 1.8km approach jetty and transfer tower platform, wharf, berthing and mooring dolphins, ship access platforms and jetty conveyor.

The work, which is part of stage one of the WICET project, is scheduled to start immediately and be completed by early 2014.

WICET is privately owned and funded by a group of Queensland coal exporters to build an export facility for thermal and metallurgical coal.

The new terminal will be at Golding Point, to the west of the existing RG Tanna terminal in Gladstone. It will be built in stages to match forecast coal export demand and operated by Gladstone Ports Corp.

Stage one has a contracted annual coal export capacity of 27 million tonnes. Once fully developed, the terminal will have an annual capacity of more than 80 million tonnes.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Boustead sees bountiful year amid high CPO prices

OPTIMISTIC: Plantation unit contributes RM267.1 million in three quarters

BOUSTEAD Holdings Bhd expects to rake in record profit this year as palm oil prices continue to trade at buoyant levels of around RM3,000 per tonne.

Out of its six core businesses, plantation is the biggest earnings contributor, followed by shipbuilding and property development.

In the three quarters ended September 2011, Boustead's plantation division contributed RM267.1 million or 45.5 per cent to the group's RM585.9 million pre-tax profits.

So far, Boustead makes an annual profit of between RM450 million and RM700 million.


Although palm oil prices have been settling from its high of RM3,800 per tonne nine months ago, the third-month benchmark palm oil futures contract on the Malaysia Derivatives Exchange is averaging at around RM3,100 per tonne.

Yesterday, the contract closed RM25 higher at RM3,097 per tonne.

"We're looking at record profits this year as palm oil prices are still strong," said Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin.

The group has an agriculture land bank of 97,648ha and so far, three quarters of that are already planted with oil palms.

"Our tree profile is at a favourable phase, of which 46 per cent of our oil palms are of prime ages. We expect to harvest about 1.1 million tonnes of fresh fruit bunches this year," he said.

With promising results, Boustead is setting aside RM1.4 billion in capital expenditure for next year.

"About 30 per cent of the money will go to plantation," said Lodin.

Yesterday, both Boustead and Pharmaniaga Bhd shareholders approved all resolutions to have Boustead's entire pharmaceutical division placed under Pharmaniaga.

Lodin said the corporate move will allow Pharmaniaga to expand its manufacturing capacity in Kedah and Perak.

"Our total capital expenditure for the pharmaceutical division amounts to RM95 million, of which a third will go to the information system," he added.

Pharmaniaga is in the business of making generic drugs and supply, trade and install hospital equipment. It also stores and distributes medicine to government hospitals and clinics.

"We have a 10-year supply concession to all 3,750 healthcare outlets under the Health Ministry throughout the country. The book value is worth some RM900 million," said Pharmaniaga managing director Datuk Farshila Emran.

Lodin said Boustead is still interested in buying ExxonMobil Corp's oil and gas assets in Malaysia, if the latter's deal with San Miguel Corp does not materialise.

"We first had a discussion with Esso in August last year. If there is a review with whomever they have made an agreement with, we are open and prepared to talk to anyone," he said.

San Miguel, in August, agreed to buy Exxon's entire 65 per cent stake in Esso Malaysia for about US$206 million (RM655 million), or RM3.50 per share.

This will give it control over a chain of petrol stations and one refinery with a capacity of 88,000 barrels a day.

Although the deal won the government approval last month, it has yet to be concluded.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Kulim gets shareholder nod for RM700m land buy

For JCorp, the RM700 million it will get from the sale means it will have cash to meet its obligations on a bond maturing end of July next year.

Johor Baru: Kulim (Malaysia) Bhd shareholders yesterday gave the go-ahead for the company to buy six parcels of oil palm plantation land in Johor for RM700 million cash from Johor Corporation (JCorp).

While the shareholders’ approval indicate their optimism of the purchase and of Kulim’s outlook, for JCorp, the RM700 million it will get from the sale means it will have cash to meet its obligations on a bond maturing end of July next year.

The sale is a major component of the JCorp group’s rationalisation exercise.

The RM700 million cash accruing from the estates’ disposal is the first out of the expected RM1 billion cash to be generated before July 31 2012. The balance of RM300 million will come from internally generated funds.

JCorp president and chief executive officer Kamaruzzaman Abu Kassim said in a statement yesterday that the group is finalising a plan for repayment of its remaining debts.

As part of the exercise, CIMB Bank which is also its adviser, and Maybank will act as joint lead managers for the issuance of new bonds in 2012.

The purchase approved by Kulim shareholders at an extraordinary general meeting yesterday comprise six parcels of oil palm plantation land with total land area of 13,687 hectares and two palm oil mills.

Meanwhile, Massive Equity Sdn Bhd (MESB), a special purpose vehicle jointly owned by JCorp and CVC Capital Partners (CVC), welcome the acceptance KFC Holdings Bhd and QSR Brands Bhd of its offer to buy the two fast food companies.

The privatisation of QSR will not result in JCorp itself incurring additional debt, as funding for the transaction will be done via MESB on the strength of the future cash flow of the two businesses. Following completion of the disposal to MESB, the proceeds therefrom will be returned to all shareholders of QSR and KFC.

The move will also present Kulim, which is currently the controlling shareholder of QSR, an opportunity to dispose of its stake in food retail businesses and focus on its core plantation business.

Kamaruzzaman said the acquisition will enable JCorp to gain direct controlling interest in both companies it considers as having good fundamentals and long-term value.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

MAS suspends 4 more routes

MALAYSIA Airlines (MAS) yesterday announced four more routes suspension, following up on the rationalisation involving eight routes of its international network announced last week.

The routes on its regional network that will be suspended early next year include twice-weekly Kota Kinabalu-Osaka return flight, thrice-weekly Kota Kinabalu-Perth return, four times weekly Kota Kinabalu-Haneda (Tokyo) return and four times weekly Kota Kinabalu-Seoul return.

All of these routes are served by Boeing B737 aircraft.

The Kota Kinabalu-Osaka route will be suspended from January 6 2012, Kota Kinabalu-Perth from January 31, the Kota Kinabalu-Haneda from February 1 and the Kota Kinabalu-Seoul from February 21.

"This suspension is until further notice and is part of our regional network consolidation involving single-aisle aircraft operations. We will be reviewing this situation in about three months, from the date of the first route suspension and will be deciding further by early April 2012," MAS group chief executive officer Ahmad Jauhari Yahya said in a statement.

Ahmad Jauhari said during the suspension, the national carrier will take advantage of its existing code-share operations with Korean Air to provide direct connectivity between Sabah and South Korea using the Korean carrier's Seoul-Kota Kinabalu return direct flights.

MAS will also also continue offering direct international connectivity to Kota Kinabalu through its existing daily B737 flights from Hong Kong and Taipei.

"In addition, we will also use our existing 86 weekly flights between Sabah and KL International Airport (KLIA) to provide immediate connections for passengers who prefer full service flights between Sabah and the cities of Perth, Tokyo and Osaka," he added.

MAS assures passengers that it will honour all forward bookings ticketed to date on the affected routes. It said where necessary, the company will make alternative carrier arrangements, at its own cost, to ensure minimum discomfort to passengers.

As for the Sandakan-Kuala Lumpur operations, MAS will continue to offer the connectivity via Kota Kinabalu, 22 times weekly from Sandakan and 25 times weekly from Kuala Lumpur, using both its daily B737 flights and daily MASwings ATR services, currently operating between Sandakan and Kota Kinabalu.

On December 14, MAS announced a major route rationalisation to stem losses expected this year and in 2012.

The rationalisation takes effect early next year and involves the withdrawal of loss-making flights from Kuala Lumpur to cities that include Surabaya, Karachi, Johannesburg, Cape Town, Rome and Buenos Aires.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Stocks to watch: Muhibbah, Perisai Petroleum, MRCB, HELP, technology-related stocks

KUALA LUMPUR (Dec 22): Trading on Bursa Malaysia on Friday ahead of the extended weekend is likely to be cautious, given the muted reaction of regional markets on Thursday following the take-up of nearly 490 billion euros from the European Central Bank at its first-ever offer of three-year loans on Wednesday.

Although the FBM KLCI closed higher on Thursday, the broader market remained weaker with losers edging gainers, a trend that will likely be repeated on Friday.

Among the stocks that could be in focus today are Muhibbah Engineering Bhd, PERISAI PETROLEUM TEKNOLOGI BHD, MALAYSIAN RESOURCES CORPORATION BHD, HELP INTERNATIONAL CORPORATION BHD and TECHNOLOGY-related stocks.

Muhibbah Engineering Bhd and its Australian joint venture partner Monadelphous Group Limited have landed a RM1.05 billion (AUD330 million) job to build an approach jetty and ship berth in Queensland.

Muhibbah said on Thursday that Monadelphous Muhibbah Marine JV (MMM) had secured the contract to build the jetty and ship berth associated with the Wiggins Island Coal Export Terminal Pty Ltd’s (WICET) Project at Gladstone in Queensland.

MMM is a 50:50 joint venture between Muhibbah CONSTRUCTION [] Pty Ltd, a wholly owned subsidiary of Muhibbah in Australia and Monadelphous Engineering Pty Ltd, a wholly owned subsidiary of Monadelphous Group Ltd.

Perisai expects contribution from its mobile offshore production unit (MOPU), which it acquired through Garuda Energy (L) Ltd to be realised by FY12.

Its managing director Zainol Izzet Ishak said on Thursday that the acquisition would be finalised by the end of this year and will start contributing to the group's bottom line from the first day of its operation as the group's asset.

MRCB’s unit MRCB Engineering Sdn Bhd was awarded a RM13.93 million contract to upgrade the Sabah Employees Provident Fund (EPF) building in Kota Kinabalu.

HELP’s net profit for the fourth quarter ended Oct 31, 2011 fell 44.6% to RM3.59 million from RM6.47 million a year earlier, due to new student recruitment affected by delays in obtaining licences and approvals for operations.

Revenue for the quarter rose to RM28.44 million from RM27.33 million in 2010.

HELP proposed a final gross dividend of two sen per share of 50 sen each, amounting to RM2.13 million for the financial year ending Oct 31, 2011.

For the financial year ended Oct 31, HELP’s net profit fell 31.6% to RM13.06 million from RM19.1 million in 2010, on the back of increased revenue of RM108.06 million from RM105.2 million a year earlier.

Meanwhile, OSK Investment Research on Thursday upgraded the technology sector to Neutral and said that better HDD pricing could help mitigate losses from the Thailand flood.

It said that against the backdrop of the massive works in progress to restore operations following Thailand’s crippling floods, the worst could well be over.

The research said it had become less bearish on the hard-hit HDD components sector given the ongoing accelerated restoration as well as potential price hike over the immediate term, which could mitigate the earnings pressure from forgone capacity in the short term.

The research house upgraded Eng Teknologi and Notion Vtec from Sell to Neutral, and upped its recommendation on JCY International to Trading Buy from Sell.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

HELP 4Q net profit falls 44.6% to RM3.59m

KUALA LUMPUR (Dec 22): HELP INTERNATIONAL CORPORATION [] Bhd net profit for the fourth quarter ended Oct 31, 2011 fell 44.6% to RM3.59 million from RM6.47 million a year earlier, due to new student recruitment affected by delays in obtaining licences and approvals for operations.

Revenue for the quarter rose to RM28.44 million from RM27.33 million in 2010.

Earnings per share for the quarter fell to 2.50 sen from 4.60 sen in 2010, while net assets per share was 88 sen.

HELP proposed a final gross dividend of two sen per share of 50 sen each, amounting to RM2.13 million for the financial year ending Oct 31, 2011.

For the financial year ended Oct 31, HELP’s net profit fell 31.6% to RM13.06 million from RM19.1 million in 2010, on the back of increased revenue of RM108.06 million from RM105.2 million a year earlier.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

MRCB gets RM13.93m job to upgrade Sabah EPF building

KUALA LUMPUR (Dec 22): MALAYSIAN RESOURCES CORPORATION BHD unit MRCB Engineering Sdn Bhd has been awarded a RM13.93 million contract to upgrade the Sabah Employees Provident Fund (EPF) building.

MRCB said on Thursday that the project involved renovating and upgrading the EPF Building in Kota Kinabalu, Sabah of approximately 400,000 square feet.

MRCB said the project would be financed via internally generated funds and/or borrowings, and completed within 18 months from Jan 16, 2012.



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.

Market Commentary

The FBM KLCI index gained 6.48 points or 0.44% on Thursday. The Finance Index increased 0.77% to 13369.96 points, the Properties Index up 0.88% to 982.1 points and the Plantation Index rose 0.19% to 7923.25 points. The market traded within a range of 8.78 points between an intra-day high of 1491.67 and a low of 1482.89 during the session.

Actively traded stocks include TMCLIFE-WA, SANICHI, HIBISCS-WA, PROTON-CG, PROTON-CH, UTOPIA, FLONIC, UEMLAND, ENVAIR and IRCB. Trading volume decreased to 1204.40 mil shares worth RM1016.97 mil as compared to Wednesday’s 1654.60 mil shares worth RM1320.54 mil.

Leading Movers were MAYBANK (+8 sen to RM8.45), GENTING (+14 sen to RM10.76), TENAGA (+7 sen to RM5.79), CIMB (+5 sen to RM7.00) and HLBANK (+32 sen to RM10.86). Lagging Movers were YTL (-3 sen to RM1.51), YTLPOWR (-2 sen to RM1.80), IOICORP (-1 sen to RM5.14), UMW (-5 sen to RM6.45) and PETCHEM (-1 sen to RM6.19). Market breadth was negative with 290 gainers as compared to 455 losers. -- JF Apex Securities Bhd



Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or hoxian@sjsec.com.my for more details.