Malaysia Morning Wrap | Bumi Armada and MISC to Evaluate Offshore Business Merger, Eye Global Expansion

The market fell all day, and Fed comments did not help. $S&P 500 Index (.SPX.US)$ trading down 60 bps, the $Dow Jones Industrial Average (.DJI.US)$ fell falling 0.47% and the $Nasdaq Composite Index (.IXIC.US)$ falling 0.64%.

$ARMADA (5210.MY)$ is considering a strategic merger with the offshore division of MISC Bhd (KL:MISC), potentially forming a major global player in the energy services sector with assets totaling more than RM20 billion. According to the memorandum of understanding, both parties will engage in a nine-month due diligence process to finalize a definitive agreement. The anticipated merger, planned as an all-share deal, aims to maintain the new entity's listing on Bursa Malaysia. Specifically, the merger will encompass MISC's division that "owns, leases, operates and maintains offshore, floating, production, storage and offloading (FPSO) terminals."

$MISC (3816.MY)$ reported a decline in net profit by 21% for the third quarter ending September 30, 2024 (3QFY2024), totaling RM338.9 million down from RM430.4 million in the same period of the previous year. The decrease is attributed to reduced charter rates for its natural gas carriers and increased operational costs of vessels, amidst a challenging forecast for its principal operations. Revenue also decreased by 12% to RM2.96 billion from RM3.37 billion, due to diminished activities in its offshore construction sector. The company noted a predicted "softer" market for liquefied natural gas (LNG) shipping spot rates in the upcoming quarter, influenced by an influx of vessel deliveries, limited growth in liquefaction capacity, and stable demand expectations in Europe. Despite these challenges, MISC declared a dividend of eight sen per share, an increase from the seven sen per share distributed in 3QFY2023.

$BJFOOD (5196.MY)$ has recorded its fourth consecutive quarterly net loss as the anti-Israel boycott continues to impact its operations, including managing the Starbucks coffee chain in Malaysia. For the first quarter ending September 30, 2024 (1QFY2025), the company reported a net loss of RM33.68 million, a significant reversal from the RM19.03 million net profit recorded the previous year. Revenue for the quarter plummeted to RM124.19 million from RM278.53 million. No dividend was declared for this period.

$MRDIY (5296.MY)$ experienced a slight net profit decrease of 1.9% to RM121.65 million for the quarter ending September 30, 2024 (3QFY2024), primarily due to increased administrative and operational costs. Despite these challenges, revenue increased by 6.4% to RM1.14 billion, supported by new store openings and higher transaction volumes. The company declared an interim dividend of one sen per share.

$PLINTAS (5320.MY)$ nearly tripled its net profit to RM12.09 million for the third quarter (3QFY2024), bolstered by higher toll collections and favorable tax conditions. Revenue also saw a substantial increase, reaching RM81.41 million. The trust remains on track to achieve its RM70 million distribution target for FY2024.

$LYSAGHT (9199.MY)$ announced a special dividend of 35 sen per share after achieving its highest quarterly earnings in eight years. The dividend payout totals RM14.56 million, with a net profit increase of 62% to RM4.79 million and a 9.2% rise in revenue to RM26.5 million for the quarter.

$KEYFIELD (5321.MY)$ reported a record 77.18% increase in net profit to RM81.12 million for the third quarter (3QFY2024), driven by improved vessel utilization and fleet expansion. Revenue grew by 45.54% to RM216.79 million. The company announced a third interim dividend of four sen per share.

$TEOSENG (7252.MY)$ saw a 32% rise in net profit to RM58.1 million for the third quarter (3QFY2024), primarily from its robust poultry farming operations. Despite a slight decline in revenue, the company declared a third interim dividend of four sen per share.

$YTLPOWR (6742.MY)$'s subsidiary $RANHILL (5272.MY)$ has terminated a joint public-private partnership with China Energy International Group Co Ltd for a water supply project in Indonesia, following the expiration of their memorandum of understanding.

$SEAL (4286.MY)$ is seeking shareholder approval to provide a corporate guarantee for a RM293 million loan facility that its associate MSR Green Energy Sdn Bhd is securing for energy projects.

$LBS (5789.MY)$ is exploring the development of a 10-gigawatt green hydrogen facility in Kota Marudu, Sabah, in collaboration with local authorities and energy companies, aiming to produce over 250,000 tonnes of green hydrogen annually from renewable sources.