MY Morning Wrap | Heineken Malaysia Takes a Hit in Q3 Earnings as Consumer Sentiment Wanes

The $S&P 500 Index (.SPX.US)$ slipped 0.2% to 4,550.43 and the $Dow Jones Industrial Average (.DJI.US)$ slid 0.2% to 35,333.47. The $Nasdaq Composite Index (.IXIC.US)$ closed little changed at 14,241.02.

$HEIM (3255.MY)$: Heineken Malaysia Bhd's net profit for the third quarter ended Sept 30, 2023 (3QFY2023) dropped 19.7% to RM87.33 million, from RM108.74 million a year before, due to weak consumer sentiment driven by rising cost of living and macro-economic concerns. Quarterly revenue declined 16.8% to RM599.66 million, from RM720.47 million a year earlier. The lower sales were due to weaker consumer sentiment, coupled with a strong base in the same quarter of last year as there was a surge in sales following the reopening of the economy and international borders. The board of directors did not recommend any dividend in respect of the quarter under review.

$UMW (4588.MY)$: UMW Holdings Bhd's net profit for the third quarter ended Sept 30, 2023 (3QFY2023) jumped 71.9% to RM173.11 million from RM100.70 million a year ago, as it recorded higher revenue with improved contributions from all its businesses, driven by sustained demand. The conglomerate's quarterly revenue grew 19% to RM4.83 billion from RM4.06 billion, with its automotive segment — its largest contributor — showing a 17.4% increase in revenue to RM4.02 billion, its bourse filing showed.

$GCB (5102.MY)$: Johor-based Guan Chong Bhd, the world's fourth-largest cocoa grinder, saw its net profit rise 10% to RM33.88 million in the third quarter ended Sept 30, 2023 (3QFY2023) from RM30.76 million a year earlier, on higher average selling prices of industrial chocolates and stabilisation of energy prices at lower levels following Russia-Ukraine tensions last year. Quarterly revenue was also up 16.8% to RM1.29 billion from RM1.1 billion a year earlier, as a result of higher average selling prices of cocoa butter and cocoa solids in tandem with rising cocoa bean prices. Higher revenue also helped offset the rise in finance cost due to higher interest expenses. The group declared a first interim dividend of two sen per share for the financial year ending Dec 31, 2023 (FY2023), payable on Jan 19, 2024. The dividend represents a payout of RM23.5 million or 27.4% of the group's net profit for the nine-month period ended Sept 30, 2023.

$VELESTO (5243.MY)$: Velesto Energy Bhd said the contract between its unit Velesto Drilling Sdn Bhd and Carigali Hess Operating Company Sdn Bhd has been extended for another one year and six months, with an estimated contract value of US$74 million (RM346.39 million). The contract, which entails the provision of a 10K jack up drilling rig, will commence from April 19, 2024 until Oct 18, 2025. Velesto added that the extension of the contract is expected to contribute positively towards its earnings and net assets.

$KSENG (3476.MY)$: Keck Seng (M) Bhd's net profit dropped 42% for the third quarter ended Sept 30, 2023 (3QFY2023) as lower palm oil prices weighed on the group’s palm oil refining margin, coupled with a smaller foreign exchange gain. Net profit came in at RM36.05 million or 10.03 sen per share, versus RM61.58 million or 17.14 sen per share a year ago. Revenue declined 24% to RM334.4 million from RM441.61 million.

$MICROLN (0126.MY)$: Technology solutions provider Microlink Solutions Bhd recorded a 98.3% decline in its net profit for the second financial quarter ended Sept 30, 2023 (2QFY2024) to RM126,000 from RM7.22 million a year ago, due to lower margin from order fulfilments and progress billings. Quarterly revenue climbed 38.4% to RM77.53 million from RM56.01 million in the previous year's corresponding quarter, mainly attributable to higher order fulfilments and progress billings particularly in its financial services and distribution services segment.

$GDEX (0078.MY)$: GDEX Bhd's net loss widened by 24% to RM8.16 million or 0.14 sen per share in the third quarter ended Sept 30, 2023 (3QFY2023), from RM6.57 million or 0.12 sen per share reported a year earlier, amid weaker showing by its logistics business. Revenue, however, rose 6.13% to RM101.11 million from RM95.28 million in 3QFY2022, fuelled by the express delivery and information technology segment. On a quarter-on-quarter basis, the group's net loss narrowed from RM11.35 million in 2QFY2023, while revenue increased 6.35% from RM95.08 million, thanks to improved demand for its courier service business activities and operating cost control via expense rationalisation and cost optimisation exercises.

$PTRANS (0186.MY)$: Debt-ridden Perak Corp Bhd has appointed Advancecon Holdings Bhd's wholly-owned subsidiary Advancecon Development Sdn Bhd as a joint venture (JV) partner to jointly develop the main infrastructure for the Silver Valley Technology Park Industrial Hub, and carry out sale of completed industrial lots with main infrastructure on 39 pieces of leasehold land in Hulu Kinta, Perak, which has an estimated total gross development value of RM1.03 billion. Perak Corp said it has issued a letter of award to Advancecon for the proposed joint development measuring 798.24 acres.

$TCHONG (4405.MY)$: Tan Chong Motor Holdings Bhd posted a net loss of RM50.70 million for the third quarter ended Sept 30, 2023 (3QFY2023), compared with a net profit of RM6.88 million in the same period last year amid persistent soft market sentiments driven by inflationary pressures and stiffer competition in both the local and overseas markets. Revenue fell 10.97% to RM649.82 million from RM729.87 million on the back of lower contribution from the automotive segment.

$SPRITZER (7103.MY)$: Spritzer Bhd's net profit surged 48.5% to a record high of RM16.97 million in the third quarter ended Sept 30, 2023 (3QFY2023), from RM11.43 million a year ago, as the company sold more bottles of drinking water amid recovery in tourism activities plus the hot weather. The leap in quarterly net profit was bigger than its quarterly revenue, which grew 10.85% to RM132.56 million, from RM119.59 million a year ago.

$TNLOGIS (8397.MY)$: Tiong Nam Logistics Holdings Bhd saw its net profit for its second financial quarter ended Sept 30, 2023 (2QFY2024) fall 26.4% to RM1.22 million from RM1.65 million a year earlier, on increased finance cost and direct operating expenses. Quarterly revenue, however, grew 3.7% to RM183.53 million from RM177 million in 2QFY2023, supported by stable source of income from the logistics and warehousing services segment and increased property development revenue. Tiong Nam said the logistics and warehousing services segment remained the largest contributor to the group, accounting for 94.6% of revenue in 2QFY2024.

$UMC (0256.MY)$: Medical equipment supplier UMediC Group Bhd is planning to transfer its listing from the ACE Market to the Main Market of Bursa Malaysia, having listed merely over a year ago in July 2022. UMediC said in a bourse filing that it has met the requirements issued by the Securities Commission Malaysia for the proposed transfer, including in terms of profit and public shareholding spread, with a healthy financial position. For the fourth financial quarter ended July 31, 2023 (4QFY2023), UMediC's net profit surged fivefold to RM3.37 million, from RM568,000 a year earlier, on the back of higher demand for medical devices and consumables from both public and private hospitals. Quarterly revenue jumped to RM12.02 million, from RM7.41 million a year ago.

$LKL (0182.MY)$: Medical and healthcare bed manufacturer LKL International Bhd has ditched plans to open up the digital healthcare market in Malaysia with Singapore-based Serv Medical Pte Ltd. On March 9 this year, LKL and Serv Medical had signed a memorandum of understanding for the purpose of selling, marketing and promoting Serv Medical's medical products or services through LKL's network or channels in Malaysia under a licence or distribution arrangement and to source and identify customers for purchasing Serv Medical's medical products or services in Malaysia.