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Cahya Mata Sarawak Berhad’s Financial Performance In FY2019 – Profit before tax reported at RM251 million

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Kuching (Sarawak), Wednesday, 26 February 2020 – Cahya Mata Sarawak Berhad (CMSB – 2852) is pleased to announce its financial performance for the financial year ended 31 December 2019 (FY2019).

The Group reported revenue of RM1.74 billion for FY2019, an improvement of 2% compared to RM1.71 billion in FY2018. However, its profit before tax profit (PBT) of RM251.05 million contracted 33% compared to RM372.32 million in the corresponding year. Softer performance in FY2019 was mainly due to significant decrease in aggregate contribution from associate companies. Lower operating profits from CMSB’s traditional core business divisions namely Cement, Construction & Road Maintenance and Property Development Division also impacted FY2019 performance.

Cement Division. FY2019 revenue improved by 8% to RM601.62 million compared to RM557.85 million in FY2018. However, PBT declined 19% to RM73.11 million compared to RM90.14 million in FY2018, resulting from increased production costs mainly due to scheduled maintenance and higher raw material prices. Imported clinker prices have increased due to higher demand from regional market coupled with reduced supply from China. To address this issue, we are focusing to improve the clinker plant’s operational efficiency to reduce reliance on imported clinker and hence reducing the plant’s maintenance cost.

Construction Materials & Trading Division. FY2019 revenue improved by 7% to RM596.9 million while the PBT outpaced revenue growth, increasing by 30% to RM92.70 million. Excluding one-off reversal of provision of RM14.83 million in FY2019, this Division would have still registered a growth of 9% compared to corresponding year. Moving forward, we expect demand for crushed aggregates as well as premix materials to continue to augur well in the foreseeable future due to the ongoing Pan Borneo Highway and other road projects in the State.

Construction & Road Maintenance Division. FY2019 revenue decreased by 9% to RM502.45 million compared to RM554.21 million in FY2018 while PBT declined to RM42.26 million in FY2019 from RM90.38 million in FY2018, a reduction of 53%. The profitability of this business division was impacted mainly due to costs revision for the Pan Borneo Highway project and retrenchment compensation amounting to RM4.16 million. We are actively identifying opportunities to secure new road maintenance contracts as well as replenish our construction orderbook from the implementation of major infrastructure projects in the State.

Property Development Division. FY2019 revenue improved by 3% to RM136.26million compared to RM132.21million in FY2018. However, PBT dipped 40% to RM20.06million compared to RM33.59 million in FY2018.The Division’s performance was affected by the soft property market and unrecovered interest costs for the land surrendered to the Government. Besides our on-going property projects, we are also looking into unlocking the value of our vast landbank in the capital city of Kuching and Samalaju Industrial Park which are still kept at nominal sum in our book.

Strategic Investment. The Group recorded share of profits from its associates of RM59.59 million in FY2019, lower by 43% compared to FY2018’s bumper contribution of RM105.34 million. OM Materials (Sarawak) Sdn Bhd has been impacted due to weak commodity prices since beginning of 2019. That said, we remain confident of its longer-term prospects due to its position in the first quartile of the global production cost curve. Our 50%-owned associate ICT company, SACOFA Sdn Bhd, recorded higher contribution of RM43.00 million in FY2019, an increase of 8% in comparison to FY2018’s contribution of RM39.67 million. Together with other associate companies, we expect our strategic investments to continue to deliver decent growth.

Commenting on the results, CMSB Group Managing Director, Dato Isaac Lugun, said: “Despite the challenges we faced in 2019, we remain confident that we will be able to improve our financial performance moving forward, backed by various initiatives and new strategies throughout all our Divisions. The Group is well positioned to benefit from all key economic drivers in Sarawak, supported by healthy balance sheet and our three-pronged growth strategy. Specifically, this strategy calls for CMSB to; firstly, reposition and fortify all traditional core businesses, secondly, to fully implement and grow the strategic businesses and, lastly, to reposition and strengthen the CMS brand”.

CMS Property’s Rivervale takes Sarawak’s property market to new heights with big win at ‘SHEDA Excellence Award’

CMS Property’s Rivervale Takes Sarawak’s Property Market to New Heights with Big Win at ‘SHEDA Excellence Award’

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Kuching (Sarawak) January 17, 2020 – CMS Property Development Sdn Bhd (CMSPD) continues to prove to be a leading force in the Sarawak property market, winning the prestigious ‘SHEDA Excellence Award’ in the ‘Strata Development (High Rise)’ category for Rivervale Condominium at the recent industry-regulators annual gala dinner. The ‘SHEDA Excellence Award’ was based on four strict criteria namely; (1) Project Overview; (2) Architecture & Design; (3) Marketing Strategy and (4) Community Benefits & Environmental Consideration.

Y. Bhg Dato Isaac Lugun, Group Managing Director of Cahya Mata Sarawak Berhad said, “The company went to great lengths in strategising and planning during the conceptualisation of Rivervale. We wanted to build a safe, secure and serene living environment for its residents, however, we wanted more than that. We want to enable a total living ecosystem that featured fun, functionality, nature and community. That’s why you find Rivervale the way you do, packed full of amenities and facilities which include a kid’s room, mini movie theatre, game room and an open garden with Japanese koi swimming in the stream. Other facilities include a gym, playground, swimming pool, kid’s pool-jacuzzi, bbq area, gazebo and a sitting terrace. All of that, set on the backdrop of nature’s lush green beauty brings the feeling of living in an urban oasis.”

Currently, approximately 80 per cent of the Rivervale Condominium is sold , with demand for most of the 146 units of Blocks A and B garnering increasing interest with all the facilities expected of a high-rise luxury living.

“This award, along with the 2015 and 2017 awards received for The Isthmus and Rivervale Residences respectively, speaks magnitudes to the standards that we strive to achieve in the properties we build.,” Dato Isaac concluded.

CMS Roads Puts Sarawak on the Global Map for Road Excellence with International Roads Federation Awards Win

CMS Roads puts Sarawak on the Global Map for Road Excellence with International Roads Federation Awards Win

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Kuching (Sarawak), 19 December 2019 – CMS Roads Sdn Bhd, a wholly-owned subsidiary of Cahya Mata Sarawak Berhad (CMSB), was recently among just 12 elite road industry companies from around the world to be recognised by The International Road Federation (IRF) at their prestigious annual Gala Awards Dinner in Las Vegas (Nevada – USA).

Speaking about the award, CMSB’s Group Managing Director, Y Bhg Dato Isaac Lugun said, “This is the big one for the road industry and I simply cannot upsell the achievement enough. There is no bigger award in the industry, and we won outright in the category of ‘QUALITY MANAGEMENT – LONG TERM MANAGEMENT AND MAINTENANCE’, for our excellence in maintaining and developing State roads in Sarawak.

“The State Government’s foresight and vision to implement all those years ago a Performance Based Contracts (PBC) system for road development and maintenance was at the time revolutionary. It meant that contractors and concessionaires were accountable for their work and their response times in fixing any damages caused by rains, floods, tree falling or just wear-and-tear. In fact, our average response time of under one-hour (58.89 minutes to be precise) to be onsite was 30% to 40% faster than the accepted global standard. This again hails the State Government for introducing PBC’s which ultimately holds the roads concessionaires accountable and responsible. It also shows that our CMS Roads are the best Roads team in the State, highly trained, completely dedicated and have an experience level that is second to none.”

CMS Roads has over the years spared no expense in training staff, recruiting the best people, developing cutting edge innovations in R&D and purchasing state-of-the-art equipment, as can be noted by the statement by International Roads Federation Chairman, Abdullah Al-Mogbel who said, “”This year, the IRF honors 12 projects from around the world, each leading the way in innovation across major road & highway disciplines. The selection was made by an international panel of senior road development specialists. As an industry, we understand the importance of setting a long-term agenda for our research activities and capital investments. By promoting innovations and the successes in our industry, we can provide a forward-looking road map for others to follow”.

“This year has been a real year of recognition for CMS. Never in the history of CMS have we picked up so many prestigious globally recognised and globally coveted awards. BrandLaureate – Conglomerate Award 2019, Gold at the 11th Global CSR Summit Awards, retaining Our FTSE4Good Rating and now this ‘International Roads Federation Quality Management – Long Term Management and Maintenance’. I am so proud of everyone at CMS and every division” concluded Dato Isaac.

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Cahya Mata Sarawak Berhad Taking Early Steps to Address New Corruption Law

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Kuching (Sarawak) December 13, 2019 – Cahya Mata Sarawak (CMS), one of Sarawak’s largest corporations today took definitive and decisive steps against corruption and bribery by hosting an engagement session with hundreds of the company’s vendors, suppliers and partners in attendance. The engagement session declared an absolute ‘Zero Tolerance To Bribery and Corruption’ and urged all in attendance to do their part in stamping out these practices.

Cahya Mata Sarawak’s newly appointed Group Managing Director, Y Bhg Dato Isaac Lugun, in his opening address stated, “CMS takes a zero-tolerance approach to all forms of bribery and corruption. We expect our directors, employees, vendors and third-party representatives to do the same. We urge our stakeholders do so as well. CMS is committed to high standards of ethical, moral and legal business conduct.”

Furthermore, CMS has been working closely over recent months with PwC Malaysia in preparation and readiness for the introduction of the MACC Act Section 17A’s Corporate Liability Provision. Every area of potential risk within the company is being analysed and overhauled with new procedures and protocols to be implemented before 1 June 2020. CMS has even implemented an anonymous reporting process where any employee, representative, supplier or contractor can be reported if they are in breach of CMS’ Code of Conduct or Ethics Policies in any way. In fact, MACC Sarawak’s Assistant Commissioner, Encik Marcel Bulan Ak Ngabong who was also a panelist at the engagement, commended CMS for its efforts and said that “CMS has done well in getting ready so far and is the first Sarawakian company to carry out this form of exercise with its vendors and other third-parties.”

“17A is a positive move for all of Malaysia because no matter what business you are in, contract awards will be based solely on meritocracy which means standards will increase, quality will increase, and competitiveness will be the halo effect that the customers and end users will enjoy. For everyone in this room, the implications are to be embraced because the playing field is fair and open. If CMS is the most qualified, experienced and capable, we will win the tender and likewise for you as our partners and vendors, you have the assuredness of fairness and business equality.”

“The roll-out of the new procedures and protocols will of course need time and most of all support, from all companies, suppliers, vendors and customers who must collectively adopt a ‘Zero Tolerance To Corruption’ approach. But we are confident that if we embrace this mantra then together, we can become a leading light for global business to follow.”

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CMSB in Prime Position to be Major Facilitator of State’s Road Connectivity Plans

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Kuching (Sarawak), 6 December 2019 – PPES Works (Sarawak) Sdn Bhd (PPES Works), a 51% owned subsidiary company of Cahya Mata Sarawak Berhad (CMSB), today moved swiftly to allay any fears surrounding their roads business following the announcement that the current State roads maintenance contract will on 1 January 2020, be subdivided between PPES Works and a number of new roads concessionaries.

Speaking about the new State road maintenance allocation, CMSB’s Group Managing Director, Y Bhg Dato Isaac Lugun said, “We have always maintained that we are not a monopoly, and this proves it. We applaud the State for their move because competition in any market naturally breads competitive efficiency. This can only be good for the public and the road users.”

When asked about the reduction in contract for CMSB, Dato Isaac Lugun said, “Firstly, we maintain the lion’s share of the contract but secondly and most importantly is that you have to see the bigger picture here. CMSB has already done our part in laying the foundations of Sarawak’s existing roads and we have set an extremely high standard and benchmark for the new concessionaries to follow and pick-up the mantle. Now, we can focus on the bigger challenges and opportunities where our unrivalled expertise, experience, R&D and state-of-the art technology is really needed.”

“We don’t see this as a marginalization of our work scope, but rather as an opportunity to play a pivotal role in future road maintenance work in the State. Intra-state connectivity will be the arteries of socio-economic growth and the Sarawak State Government has a massive infrastructure plan that will see State-wide road connectivity becoming a priority as we head towards our State’s 2030 goals. We believe that we are best positioned to facilitate and make the connectivity plan a reality.”