MY Morning Wrap | AMMB's 1Q Net Profit Slips 7.8% on Higher Provisions

Fresh off its third straight week of declines, the tech-heavy $Nasdaq Composite Index (.IXIC.US)$ was the top-performing major index, rising 1.6%. $S&P 500 Index (.SPX.US)$ climbed 0.7%, while the $Dow Jones Industrial Average (.DJI.US)$ slipped roughly 37 points, or 0.1%.

$AMBANK (1015.MY)$ : AMMB Holdings Bhd's net profit for the first quarter ended June 30, 2023 (1QFY2024) dropped 7.8% to RM378.37 million, from RM410.39 million a year ago, as net impairment charges rose due to higher provisions. Net impairment charges increased to RM190.4 million, compared to RM63.9 million in the same quarter the previous year. The banking group also noted that profit before provisions increased by 14% year-on-year to RM694.2 million. Revenue for the quarter rose 4.27% to RM1.2 billion, from RM1.15 billion previously.

$YTLPOWR (6742.MY)$ : YTL Power International Bhd has confirmed a report in The Edge Malaysia weekly that the company is partnering with KDEB Waste Management Sdn Bhd to set up a RM4.5 billion waste-to-energy (WTE) plant in Rawang, Selangor. Based on preliminary documents sighted by the weekly, The Edge Malaysia reported in its latest issue that the plant — the Sultan Idris Shah Green Energy Plant — is slated to be built on a 245-acre site in Rawang, and will utilise municipal waste from Petaling Jaya, Hulu Selangor, Shah Alam, Subang Jaya, Ampang Jaya and Selayang, and generate 58 megawatts of electricity. Additionally, the plan is for waste materials from the plant, such as fly ash and bottom ash, to be utilised for the production of cement, the report said.

$TOPGLOV (7113.MY)$ : Top Glove Corp Bhd founder and executive chairman Tan Sri Lim Wee Chai has emerged as a substantial shareholder of Ramssol Group Bhd after raising his stake in the human resources solutions provider to 7.46%. Lim bought 14 million shares or a 5.71% stake in Ramssol on Aug 17. Prior to that, he owned 4.3 million shares or a 1.75% stake in the company. The company said the 14 million shares were acquired via a direct business transaction, but did not disclose the price. Ramssol shares closed at 36 sen on Aug 17, and at that price, the 14 million shares would have cost Lim RM5.04 million. Lim is now the third largest shareholder in Ramssol, after Ramssol managing director and chief executive officer Tan Chee Seng (30.32% stake) and non-independent non-executive director Lee Miew Lan (10.51% stake).

$MYEG (0138.MY)$ : MyEG Services Bhd's net profit rose 25.85% to RM111.56 million for the second quarter ended June 30, 2023 (2QFY2023), from RM88.64 million a year ago, driven by the increase in revenue from the group’s existing services. MyEG said the quarterly earnings were also contributed by its newly launched Zetrix blockchain platform and from the sale of Zetrix tokens. Quarterly revenue improved by 14.27% to RM184.88 million from RM161.79 million, also driven by higher revenue from existing services and the Zetrix blockchain platform. MyEG announced its first interim single tier dividend of 0.25 sen per share for 2QFY2023, with an ex-date of Oct 17 and to be paid on Nov 17.

$GASMSIA (5209.MY)$ : Gas Malaysia Bhd's net profit dropped 8.88% to RM97.81 million in 2QFY2023 from RM107.34 million in the corresponding quarter a year before, as cost of sales and administrative expenses increased, while contributions from the group’s joint venture companies dropped. Revenue rose to RM2.02 billion from RM1.78 billion previously, lifted by higher average natural gas selling price but mitigated by a lower volume of natural gas sold. The group declared a first interim dividend of 5.72 sen per share — lower compared to the 5.9 sen it paid in the same quarter last year.

$SIMEPROP (5288.MY)$ : Sime Darby Property Bhd has completed its second sukuk issuance under the sukuk musharakah programme with a nominal value of RM600 million. The issuance saw overwhelming investor interest, resulting in an oversubscription of more than eight times the initial target, with orders exceeding RM4.8 billion. In a statement today, it said that RM200 million of the sukuk was designated as sustainability sukuk, in line with sustainable finance principles.

$HEXTAR (5151.MY)$ : Hextar Global Bhd's net profit for 2QFY2023 contracted by 43.33% to RM8.67 million against RM15.3 million a year ago, dragged by lower revenue, higher operating expenses and finance costs. Revenue for the quarter dropped 14.93% to RM133.48 million, from RM156.91 million a year earlier, amid lower revenue contribution from the agriculture segment due to subdued selling prices on key herbicide products, coupled with lower revenue from the consumer products segment, which had been divested by the group in the current quarter.

$BJCORP (3395.MY)$ : Berjaya Corporation Bhd’s subsidiary, Inter-Pacific Securities Sdn Bhd (IPS), acquired 16.80 million ordinary shares (equivalent to 1.51% equity interest) in 7-Eleven Malaysia Holdings Bhd (SEM) through direct transactions, for a cash consideration of approximately RM30.77 million. This brings the combined equity interest of BCorp and its subsidiaries in SEM to about 14.37%. The acquisitions were funded internally by IPS and have no expected material impact on BCorp group’s financials for the current fiscal year.

$PANAMY (3719.MY)$ : Panasonic Manufacturing Malaysia Bhd’s net profit surged 78.31% to RM20.42 million for 1QFY2024 from RM11.45 million a year earlier, driven by several factors including lower raw material costs, especially for steel and other major raw materials. Panasonic also attributed the higher quarterly earnings to a higher foreign exchange gain of approximately RM4.8 million, from RM3 million previously, as a result of a weaker ringgit against the US dollar, and an increase in interest income by RM2.8 million following the recent interest rate hike. Quarterly revenue, however, slipped 6.34% to RM228.24 million from RM243.68 million last year, dragged by lower sales mainly due to the discontinuance of the kitchen appliances business since the end of the last financial year.

$PERTAMA (8532.MY)$ : Pertama Digital Bhd's net loss widened to RM4.5 million for 2QFY2023 from RM24,000 in the previous year’s corresponding quarter, mainly due to higher administrative and operating expenses. This is the group’s fifth straight quarterly loss. Revenue came in 37.15% higher at RM1.65 million compared with RM1.21 million in 2QFY2022, due to higher commission earned from its eJamin bail collection service — a digital bail payment solution used in criminal courts throughout the country.

$CEB (5311.MY)$ : Electronics manufacturing services (EMS) provider Cape EMS Bhd reported a net profit of RM15.16 million for its 2QFY2023 on the back of a revenue of RM121.78 million. There are no comparative year-on-year figures as the group was only listed on Bursa Malaysia’s Main Market on March 10, 2023. The group’s board of directors declared a first interim single-tier dividend of 0.55 sen per share, payable on Sept 29, 2023. Compared with the preceding quarter of 1QFY2023, Cape EMS’ net profit increased 78.38% from RM8.5 million, despite lower revenue, largely due to higher finance income from higher interest income received, and favourable exchange movements between the ringgit and US dollar. The group's revenue dropped 11.34% quarter-on-quarter from RM137.35 million, on lower sales recorded from new customers in industrial electronic products of thermal energy devices, which was partially moderated by an increase in orders for industrial electronic products — particularly in wireless communication equipment.

$LAGENDA (7179.MY)$ : Lagenda Properties Bhd's net profit fell 34.13% to RM33.19 million in 2QFY2023 from RM50.38 million a year ago, amid lower contribution from its property development segment due to the lower progress percentage of completion contributed from current projects. Its quarterly net profit was also hit by higher finance costs of RM5.34 million, a sharp increase of 72.53% over RM3.11 million recorded a year ago. In line with the weaker net profit, revenue for the quarter dropped 24.04% to RM196.38 million, from RM258.55 million previously. Despite posting weaker quarterly performance, the group declared an interim dividend of three sen per share.

$MBRIGHT (2097.MY)$ : Meta Bright Group Bhd unit, Meta Bright Australia Pty Ltd, a subsidiary of, has entered into an equipment leasing agreement valued at RM23.7 million with Australian copper mining company Mt. Cuthbert Resources Pty Ltd for mining operations. The one-year minimum contract focuses on mining equipment rental, with the specific equipment list to be finalised by both parties as part of Meta’s leasing business expansion strategy. The agreement is anticipated to boost the group’s future earnings, generating monthly revenue of around AUD223,000.

$SKYGATE (7249.MY)$ : Ewein Bhd has appointed Tay Seng Chew as executive chairman of the Penang-based property development company. He replaces Ewe Lay Khim, who is resigning to pursue other business interests and personal commitments. Goh Kiang Teng, 51, will assume the role of executive director and chief executive officer at Ewein. Goh currently holds a 2.59% direct stake in Ewein. Ewein also announced the resignation of Datuk Choong Khuat Seng and Eric Lim Seng Keat as the group’s independent, non-executive directors. Replacing them are Mazlina Mohamad and Rosnani Mahmod. The changes to the board follow the entry of Ooi Eng Leong, the managing director of ACE Market-listed NationGate Holdings, as Ewein’s largest shareholder with a 43.82% stake as at June 16.

$FAJAR (7047.MY)$ : Fajarbaru Builder Group Bhd has formed a joint venture with hostel management company Care Dynamic Sdn Bhd (CDSB) for a labour quarters project in Seremban. Fajarbaru said the group’s wholly-owned subsidiary Fajarbaru Land (M) Sdn Bhd (FLM) entered into a JV agreement with CDSB to jointly undertake the development. FLM owns a 60% stake in the JV, Fajarbaru Dynamic Development Sdn Bhd (FDD), while CDSB owns the remaining 40%. Fajarbaru said the project has an estimated gross development value of RM172.4 million and comprises the development and construction of 672 units of centralised labour quarters on a 10.9-acre plot of land in Sungai Gadut, Seremban. The plot of land is owned by Sungei Gadut Development Sdn Bhd, which granted CDSB power of attorney over the land.

$COMFORT (2127.MY)$ : Comfort Gloves Bhd posted a net loss of RM4.18 million or 0.72 sen per share for 2QFY2023, versus a net profit of RM3.2 million or 0.55 sen per share a year earlier. This was mainly due to a reduction in margin resulting from higher costs and lower average selling prices (ASPs), the group said in a filing to Bursa Malaysia. Earnings were also affected by a provision for taxation on the profit of a subsidiary, amounting to RM2.5 million. Revenue tumbled 54.83% to RM90.23 million from RM199.77 million in 2QFY2022 primarily due to lower sales order from both local and overseas customers.

$PPHB (8273.MY)$ : Public Packages Holdings Bhd reported a 20.2% decrease in net profit for the second quarter ended June 30, 2023 (Q223), reaching RM8.45 million compared to RM10.59 million in the previous year, reflecting a drop in revenue. During the quarter, the packaging supplier experienced a decline of 9.9% in revenue, which fell to RM49.92 million from RM55.39 million recorded earlier. Public Packages attributed the downturn to reduced demand from customers in its manufacturing division, which resulted in lower sales. For the first half of 2023 (1H23), the company’s net profit saw a 2.3% dip, reaching RM17.48 million compared to RM17.88 million in the same period last year. Similarly, revenue for 1H23 decreased by 5.6% to RM103.19 million from RM109.32 million in 1H22.

$BHIC (8133.MY)$ : Boustead Heavy Industries Corp Bhd (BHIC) is disposing of its 20.77% stake in Boustead Naval Shipyard Sdn Bhd (BNS) to the Ministry of Finance (MOF) for a nominal sum of RM1, in line with the government’s decision to take over the troubled littoral combat ship (LCS) contractor. BHIC, the shipbuilding arm of Boustead Holdings Bhd, said its indirect wholly-owned subsidiary Perstim Industries Sdn Bhd has entered into an agreement with Ocean Sunshine Bhd, a company wholly-owned by the Minister of Finance Inc-owned AES Solutions Sdn Bhd, for the disposal. BHIC said the RM1 selling price was determined in consideration of BNS’ latest audited net liabilities position of RM848.45 million as at end-December 2022, as well as to facilitate the government’s decision to take over the LCS contractor.

$JOE (7096.MY)$ : Joe Holding Bhd is planning to consolidate every 10 existing shares held by its shareholders into one share on an entitlement date to be determined later. The group, formerly known as GPA Holdings Bhd, said the proposed share consolidation would lead to a reduction in the number of its shares available in the market and may reduce the magnitude of fluctuation of the share price.