The Dow looks like going on a new upswing!

Petronas Chemicals 4Q net profit up 5.7% to RM932m, proposes RM1.52b dividends

KUALA LUMPUR: Petronas Chemicals Group Bhd reported net profit of RM932 million in the fourth quarter ended March 31, 2011, an increase of 5.7% from the RM881 million a year ago.

It said on Thursday, May 26 that revenue rose 8.9% to RM4.353 billion from RM3.996 billion while earnings per share were 12 sen. It proposed dividend of 19 sen per share totaling RM1.52 billion.

“The increase was achieved on the back of higher realised prices across most petrochemical products. Overall, the group’s production volume was lower due to maintenance activities during the current quarter,” it said.

Petronas Chemicals said the group’s operating profit declined slightly by RM96 million due principally to costs incurred for maintenance activities in the current quarter. The impact of higher cost was however offset by lower tax expense and higher share of profits from associates and jointly controlled entities.

For the financial year ended March 31, its net profit increased by 36.1% to RM2.994 billion from RM2.199 billion. Revenue rose 19.5% to RM14.586 billion from RM12.203 billion supported by higher prices and volume addition contributed by its acquisitions, Optimal Chemicals (Malaysia) Sdn Bhd and Optimal Glycols (Malaysia) Sdn. Bhd.

“The group achieved operating profit of RM3.7 billion, an increase of RM405 million (12%) from previous year.

“The group's results were further supported by the strong performance of BASF Petronas Chemicals Sdn. Bhd., which primarily contributed towards higher share of profits from associate and jointly controlled entities by RM533 million,” it said.

The group's EBITDA was at RM4.677 billion, up 23% or RM875 million from a year ago.

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Pengerang oil and gas complex to benefit Petronas Chemicals

PETALING JAYA: Petronas Chemicals Group Bhd will undoubtedly benefit from parent company Petroliam Nasional Bhd's (Petronas) plan to build a US$20bil integrated downstream oil and gas complex in Pengerang, Johor.

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The research house said Petronas Chemicals would report strong fourth-quarter earnings for the financial year ended March 31 (due to be out tomorrow), with a growth of 36% quarter-on-quarter and 34% year-on-year.

The better earnings will be driven by higher margins on all of its products, improved petrochemical product prices (owing to higher oil prices) and a smaller increase in costs, especially ethane cost which is relatively fixed due to contracts.

It maintains an “outperform” call on the stock and said the share price was likely to be re-rated for its strong earnings in the fourth quarter and improved fundamentals, both short term (due to higher oil price and rising volume) and long term (its expansion plans and industry margin improvement post-2011 due to the industry upcycle).

“The stock remains attractive, given its superior growth profile and profitability. We continue to apply a calendar year 2012 EV/EBITDA (enterprise value/earnings before interest, taxes, depreciation and amortisation) of 10 times to the stock, leading to an unchanged target price of RM10,” it said.

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Has it paid to panic over the EU crisis headlines?

It’s a very ugly open this morning…because of new concerns that Spain and Italy are to join Ireland and Greece as problem children of the EU…again. Each and every time we’ve seen the markets get hit badly here in the US over some concerns about some smaller countries in Europe who are going to bail out their bankers and cut social services to kick the can further down the road, I’ve reminded you guys that we should use such catalysts as buying opportunities. And that has indeed been the right approach. Look at the recent trends of concerns about the EU and their budget over the last twelve months:

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Smartag Solutions, Customs to start trial run of RFID system June 1

KUALA LUMPUR: Smartag Solutions Bhd and the Customs Department will start the trial run of the radio frequency identification (RFID) based security and trade facilitation system on June 1.

The company said on Monday, May 23 the trail run would be held at all the Customs checkpoints nationwide with participants from the logistics and manufacturing sector including Western Digital, TNT, Federal Express Brokerage (Fedex) and Priority Cargo.

It said under the trial, users would use the RFID seal to secure their containers when entering, leaving, and moving within the country.

With the usage of the system, the users will be able to automatically identify the container’s movement electronically via the RFID seal to the RFID readers that are set up by Smartag in the various Customs checkpoints across the country.

Smartag said the system would reduce the congestions at various checkpoints while increasing the department’s efficiency in tracking and clearing the containers.

Its chief executive officer PK Lim said the project reflected the abilities of the Malaysian public and private sector to work together to provide Malaysia the competitive edge as the country moves up the value chain.”

“With this system in place, Smartag is hopeful that the project will be a major contributor to the group revenues starting from next year,” Lim said.

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Markets Preview

Asia Media raising profit margins by 50pc

Kuala Lumpur: Asia Media Group Bhd, the country's largest transit-TV network operator, is increasing gross profit margins in the current year by 50 per cent, its controlling shareholder Datuk Ricky Wong Shee Kai said.

Thirty-year-old Wong, who has a first class honours in finance from Lancaster University in UK, owns slightly more than 45 per cent of the company.

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Asia Media is expected to announce its results in a day or two.

Market expectation is nothing less than a 100 per cent growth in net profit for the first quarter ended March 31 2011, from its group level net profit of RM2.17 million posted in the final quarter of 2010, if the company is to match analysts' expectations.

TA Securities, in a report, said Asia Media is forecast to post re-venue of RM31.6 million, alongside a gross profit of RM16.5 million, while net profit is expected to be in the range of RM11.9 million.

Read more: Asia Media raising profit margins by 50pc

Comparing the Dow, Hang Seng and KLCI charts

Week in Review: China, Big Tech and a Sideways Market

O&G counters advance ahead of Friday announcement of downstream project

PETALING JAYA: Oil and gas (O&G) stocks rose yesterday on the local bourse as several O&G service providers are expected to benefit from a multi-billion ringgit downstream project to be announced on Friday by the Government, and the gains in these stocks were also in line with the rise seen on the broader market.
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Dialog Group Bhd, which was up 14 sen to RM2.70 with a turnover of 13.4 million shares yesterday, stands to gain from the RAPID project as it gives better visibility to its proposed RM5bil independent deepwater petroleum terminal in Pengerang.

“Besides the tank terminal project, Dialog has the edge in providing engineering, procurement and construction (EPC) operations as well as specialist services and plant maintenance activities for this new complex given the proximity of its existing tank terminal project.

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Dialog climbs to fresh highs, investors upbeat on prospects

KUALA LUMPUR: Shares of DIALOG GROUP BHD [] climbed to fresh highs of RM2.73 in late afternoon trade on Thursday, May 12 as investors were upbeat about its prospects.

At 4pm, Dialog was up three sen to Rm2.73 with 12.71 million shares done.

The FBM KLCI fell 1.88 points to 1,534.15. Turnover was 696.86 million shares valued at RM956.51 million. There were 250 gainers versus 447 losers and 279 stocks unchanged.

Petroliam Nasional Bhd is reported to be investing up to RM50 billion in new integrated downstream project to expand its business and further spur the growth of Malaysia’s oil and gas downstream sector.

The signing ceremony is expected to be done on Friday.

Then project would likely be the independent deepwater petroleum terminal project at Pengerang, Johor which is jointly undertaken by Dialog and Vopak.

Dialog and Vopak’s combined investment in the terminal would be RM5 billion and over a seven year period. Dialog’s investment would be RM2.5b of which 30% would be from equity and 70% from project financing.

Dialog and Vopak are the core facilitators for the project, which is viewed as an entry point project (EPP) under the government’s Economic Transformation Policy (ETP).

There are tremendous spinoffs opportunities from the Pengarang project and attract combined investments of another RM95 billion.

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Bull run in the making?

Ingenuity yet to submit its proposal

It has only signed a collaborative deal on an integrated hospital information system

KUALA LUMPUR: Ingenuity Solutions Bhd said it had yet to submit to the Government its proposal on its “integrated hospital information system.”

New major shareholder Datuk Feroz Moidunny said the company had merely signed a collaborative agreement with Advance Healthcare Information Systems Sdn Bhd and Advance Health Care Solutions Austria to submit a proposal on the interlinking of hospitals, clinics and data of patients in Malaysia.

“We will submit the proposal soon, there are several layers to the process,” Feroz told a press conference.

He said the proposal was a private initiative but declined to elaborate on how it would be funded.

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09.05.11 Sell Down

23.05.11 Sell down continued unabated!

First tender for MRT to kick off next month

KUALA LUMPUR: The first tender of the Klang Valley mass rapid transit (MRT) project, which is for the elevated guideway package, will open next month and the contract is expected to be awarded in November this year.

Syarikat Prasarana Negara Bhd (Prasarana) group director of project development Zulkifli Yusoff said works on the first package of elevated track, which is between Maluri and Plaza Phoenix, will start by November or early December.

He said from then on, tenders will be called every month until end of next year. The underground track tender will be called sometime in December.

Read more: First tender for MRT to kick off next month

Ingenuity Solutions queried by Bursa, stock suspended

PETALING JAYA: Loss-making Ingenuity Solutions Bhd is poised to be ............. Its public relations company Esente Communications Sdn Bhd said in an e-mail invite that Ingenuity, Advance Healthcare Information Systems Sdn Bhd and Advance Health Care Solutions Austria would sign a collaborative agreement to “submit a proposal on the interlinking of hospitals and clinics in Malaysia to the Ministry of Health via the Integrated Hospital Information System”.

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KLCI

Mclean Technologies offer of 2.7m shares oversubscribed 100.49 times

KUALA LUMPUR: MClean Technologies Bhd’s offer of 2.7 million new shares offered to the public under its listing exercise at 52 sen each was oversubscribed by 100.49 times.

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Malaysian O&G poises for multi-year growth story

KUALA LUMPUR: JP Morgan Securities Research says the Malaysian oil & gas sector is poised for a multi-year growth story, as Petroliam Nasional Bhd refocuses its efforts on domestic oil and gas exploration and production. Its top sector pick is DIALOG GROUP BHD [].

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