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CMSB reports stable earning with pre-tax profit of RM320 million

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Kuching (Sarawak), Friday, 24 February 2017 – Cahya Mata Sarawak Berhad (CMSB – 2852), the State’s leading infrastructure facilitator, is pleased to announce its financial performance for the financial year ended 31 December 2016 (FY2016). The Group reported a total revenue of RM1.55 billion and pre-tax profit (PBT) of RM302.14 million for FY2016. Revenue and PBT decreased by 13% and 22% in comparison to the preceding year’s (FY2015) record result of RM1.79 billion and RM388.60 million.

The Group, however, recorded a strong recovery in profits during the second half of 2016 (2H2016) with PBT of RM236.47 million in comparison to the first half of 2016’s (1H2016) PBT of RM65.67 million. The Group’s PBT for the fourth quarter ended 31 December 2016 (4Q16) of RM141.73 million improved by 50% in comparison to the third quarter ended 30 September 2016’s (3Q16) PBT of RM94.74 million and 16% in comparison to the fourth quarter ended 31 December 2015’s (4Q15) PBT of RM122.32 million.

Despite challenging market conditions, the Group’s Cement Division recorded a PBT of RM105.00 million for its contribution towards the results for FY2016 which is 2% higher than FY2015’s PBT of RM103.17 million. The Construction Materials & Trading Division reported a PBT of RM106.75 million for FY2016, comparable with FY2015’s PBT of RM107.99 million despite lower revenues, due to improved margins partly from lower costs of bitumen and diesel. The Construction & Road Maintenance Division recorded a PBT of RM85.40 million (excluding the share of results of joint ventures), a decline in comparison to FY2015’s profit of RM133.33 million by 36%. This was due to less construction works undertaken and due to the reinstatement of arrears of revenue from routine maintenance work during 2015 resulting in exceptionally solid financial results for the year. The Property Development Division’s PBT improved to RM23.51 million during FY2016 from a PBT of RM19.85 million in FY2015, representing an 18% increase.

The Group also recorded losses of RM35.17 million in FY2016 from the share of results of its associates. This is largely due to the losses reported by the Group’s 25% associate, OM Materials (Sarawak) Sdn Bhd during the first half of this year. The results have since improved as CMSB recorded a profit of RM13.73 million from the share of results of its associates during the second half of 2016 (2H2016). This performance level, going forward, is expected to steadily improve.

Commenting on the results, Dato’ Richard Curtis, Group Managing Director of CMSB, said: “The previous year (2016) was a challenging period for us in terms of Group performance meeting targets as we had faced challenging market and operational conditions. These macro factors included low commodity selling prices, higher costs of raw materials in the Cement Division resulting from the strong U.S. dollar, and generally the sluggish private and public sector demand attributable to bank lending restraints and the lack of any new big projects. Our Group’s core businesses, however, remained resilient during this period and continued to report stable earnings.

We continue to remain optimistic that CMSB will generate stable financial performances in the medium term, as this is evidenced by the strong recovery in profits during the second half of 2016 (2H2016). We expect this upturn to be sustained with performance levels rising further in 2017 and 2018 when it is expected that the market sectors CMSB are involved in are likely to see demand growth and price improvements. At a macro level we remain positive on a steady albeit modest recovery in oil and commodity prices to levels that enable CMSB’s businesses to grow positively. Within Sarawak, the continued focus towards a development oriented State budget bodes well for our core businesses.”

“Our confidence in our prospects is supported by our healthy balance sheet, our experienced management team and our focused portfolio of core business Divisions which are well positioned to benefit from the State’s ever growing infrastructure needs including the RM27.0 billion Pan Borneo Highway project, which is now kicking off. Looking further to the future, CMSB’s potential high growth investments in SACOFA Sdn Bhd, Malaysian Phosphate Additives (Sarawak) Sdn Bhd and OM (Sarawak) Sdn Bhd are confidently expected to materially transform our longer-term profits growth.

“We believe that CMSB continues to be one of the best proxy listed investments for Sarawak’s economic growth. This is consistent with the State’s promotion of energy intensive industries under the Sarawak Corridor for Renewable Energy (SCORE) initiative, its rural transformation plans and the infrastructure and related services that will therefore be required across the State. These few drivers, which reflect CMSB’s business focuses, are set to propel the State’s economy and CMSB to new heights in the medium and long term”, said Dato’ Curtis.

CMSB’s dividend policy provides for a net payout ratio of 40% of its annual consolidated profit after tax and non-controlling interests (PATNCI) to shareholders subject to a minimum of 2 sen per share. For FY2016, the Board is proposing a first and final tax exempt (single-tier) dividend of 6.30 sen per share subject to shareholders’ approval at the forthcoming Annual General Meeting. This represents a payout ratio of 40.01% and amounts to a dividend payable of RM67.69 million (FY2015:RM48.35 million).

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CMS conveys condolences to the family of former Sarawak Chief Minister Datuk Patinggi Tan Sri Adenan Satem

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All of us at Cahya Mata Sarawak are deeply grieved by the sad passing of our beloved Chief Minister and our deepest condolences go out to his family. His vision for Sarawak as our Chief Minister has transformed our socio-economic landscape dramatically. It has led Sarawak into a new era of positive and inclusive development with a strong focus on trying to address the people’s needs and concerns. This has led to his vision and style of leadership to be seen by many as a role model to look up to. His incisive mind, his sense of humour as well as his much loved voice will be sorely missed. I am sure however, that his vision and his achievements to date will not be discarded but prove to be a rock-solid foundation that will continue to drive our future development in which we, at CMS, will be proud to respectfully continue to support.

Financials_Cement

CMSB’s pre-tax profit reported at RM160 million for the first nine months of 2016

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Kuching (Sarawak), Wednesday, 30 November 2016 – Cahya Mata Sarawak Berhad (CMSB – 2852), the State’s leading infrastructure facilitator, is pleased to announce its financial performance for the first nine months of 2016 (PE2016). The Group reported a total revenue of RM1.10 billion and pre-tax profit (PBT) of RM160.41 million for PE2016. Revenue and PBT decreased by 14% and 40% in comparison to the preceding year’s corresponding period’s (PE2015) result of RM1.28 billion and RM266.28 million.

The Group’s PBT for the third quarter ended 30 September 2016 (3Q16) of RM94.74 million improved by 122% in comparison to second quarter ended 30 June 2016’s (2Q16) PBT of RM42.76 million and is comparable with the third quarter ended 30 September 2015’s (3Q15) record PBT of RM104.56 million.

The Group’s Cement Division recorded a PBT of RM76.98 million for its contribution towards the results for PE2016 which is 14% lower than PE2015’s record PBT of RM89.23 million. This is attributable to lower sales volumes, costs linked to the new cement mill, unscheduled shutdown of the clinker plant due to prolonged maintenance work in January 2016 and higher costs both in imported raw materials and cement due to the still weaker Ringgit. Despite lower revenues, the Construction Materials & Trading Division reported a PBT of RM74.65 million for PE2016, a 3% increase in comparison with PE2015’s PBT of RM72.79 million, due to improved margins partly from lower costs of bitumen and diesel. The Construction & Road Maintenance Division recorded a PBT of RM57.61 million (excluding the share of results of joint ventures), a decline in comparison to PE2015’s profit of RM89.02 million by 35%. This was due to less construction works undertaken and higher costs for state road maintenance.

The Group also recorded losses of RM40.49 million in PE2016 from the share of results of its associates. This is largely due to the losses reported by the Group’s 25% associate, OM Materials (Sarawak) Sdn Bhd during the first half of this year. The results have since improved as CMSB recorded a profit of RM8.42 million from the share of results of its associates during the third quarter of 2016. This performance level, going forward, is expected to steadily improve. OM Materials (Sarawak) operates a ferrosilicon alloys smelter in Samalaju Industrial Park where commodity prices have been at record lows.

Commenting on the results, Dato’ Richard Curtis, Group Managing Director of CMSB, said: “Our performance during the first nine months of this year has been affected by challenging market and operational conditions. These macro factors included low commodity selling prices, higher costs of raw materials and of imported cement (in 1H16) resulting from the strong U.S. dollar in the Cement Division, and generally the sluggish private and public sector demand attributable to bank lending restraints and the lack of any new big projects.”

“Our Group’s core businesses, however, remain resilient even during this period, and have continued to report stable earnings. We also remain confident that CMSB will achieve an acceptable performance for the full year of 2016, which is evidenced by the strong recovery in profits in 3Q16 as against the 1Q16 and 2Q16 results. We expect this upturn to be sustained with performance levels rising again in 2017 when it is expected that the market sectors CMSB are involved in are likely to see some demand growth and price improvement. At a macro level, we remain positive on a steady albeit modest recovery in oil and commodity prices to levels that enable CMSB’s businesses to grow positively. Within Sarawak, the continued focus towards a development oriented State budget bodes well for our core businesses.”

“Our confidence in our prospects is supported by our healthy balance sheet, our experienced management team and our focused portfolio of core business Divisions which are well positioned to benefit from the State’s ever growing infrastructure needs including the RM27.0 billion Pan Borneo Highway project, which is now kicking off. Looking further to the future, CMSB’s potential high growth investments in SACOFA Sdn Bhd, MPA (Sarawak) Sdn Bhd and OM Materials (Sarawak) are confidently expected to materially transform our longer-term profits growth.”

“We believe that CMSB continues to be one of the best proxy listed investments for Sarawak’s accelerating economic growth. This is consistent with the State’s promotion of energy intensive industries under the Sarawak Corridor for Renewable Energy (SCORE) initiative and the infrastructure and related services required across the State. These two drivers, which reflect CMSB’s two business focuses, are set to propel the State’s economy and CMSB to new heights in the medium and long term”, said Dato’ Curtis.

Official Launch of East Malaysia's First Integrated Cement Plant

Official Launch of East Malaysia’s First Integrated Cement Plant

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Kuching (Sarawak), Tuesday, 8 November 2016 – Cahya Mata Sarawak Berhad (CMSB – 2852), the State’s leading infrastructure facilitator, is pleased to announce that its Cement Division, Sarawak’s sole cement and clinker manufacturer, today achieved a major capacity milestone with the official launch of East Malaysia’s first integrated cement plant. This is CMSB’s third and largest cement grinding plant and it has been integrated with the Division’s adjoining clinker plant. This grinding plant was built at a cost of RM190 million at Mambong outside of Kuching to anticipate the growing demands of a rapidly expanding and developing State.

Officiating the launch was YAB Datuk Patinggi Tan Sri (Dr) Haji Adenan bin Satem, Chief Minister of Sarawak accompanied by other senior Ministers and State dignitaries, CMSB Group Executive Director, Datuk Syed Ahmad Alwee Alsree and CMSB Group Managing Director, Dato’ Richard Curtis.

The 1 million-metric tonnes (MT) grinding plant incorporates state-of-the-art European technology comprising a Ball Mill (with a rated capacity of 150 MT/hour), a high efficiency Separator, 2 units of 10,000 MT concrete silos, 4-line bulk loaders and a 3,000 bag/hour packing and palletizing machine. Its performance promises to maximise efficiency and quality with minimum downtime.

The Engineering, Procurement and Construction contract for this plant was awarded to Christian Pfeiffer Maschinenfabrik GmbH, a leading German company in this sector, in April 2014. Construction began in July 2014, production ramp up commenced in December 2015 and it was fully commissioned earlier this year.

Dato’ Richard Curtis, Group Managing Director of CMSB, said: “Today we respectfully suggest marks another milestone in the transition of our State to become both a major regional economic powerhouse and one where rural economic development has not been neglected. Without a year round reliable supply of cement across the State, development will always be held back. This third plant will increase CMSB’s total annual rated cement production capacity by almost 60% to 2.75 million MT, well above current local demand of around 1.7 – 1.8 million MT.”

“This will enable CMSB to meet growing cement demand in Sarawak, including from big projects such as the Baleh Dam and the Pan Borneo Highway; to have significant reserve production capacity to materially reduce the risk of supply disruptions in the State; to extend our supply into nearby markets; as well as to produce more than one type of cement. Furthermore, with the significant quantities of slag and other waste materials now becoming available in the State, CMSB’s three cement plants will be better able to recycle such wastes into cement and other road and construction materials thus both significantly reducing the State’s levels of industrial waste and supporting a sustainability agenda, something that is of great concern to the international investment community.”

“CMSB’s investment into its Cement Division over the last 10 years has exceeded RM600 million ranging from acquiring this clinker plant, setting up storage terminals in Miri and Sibu, general plant upgrades, three dedicated cement carrying barges and most recently into this plant. All this is testament to CMSB’s sense of responsibility that comes with its position as a major supplier of construction materials within the State. We also have sought to be a responsible corporate citizen engaging with the local community to give back, carefully limiting emissions and ensuring uninterrupted supply of quality cement at market prices.”

“With long term demand for cement set to grow, today’s official launch stands as a testament to CMSB’s sense of responsibility to ensure its cement production capacity retains ample reserves to enable uninterrupted supplies of cement into our State.”

The official launch also included the signing of a Memorandum of Understanding (MoU) between CMS Clinker Sdn Bhd and ZHA Environmental Sdn Bhd, to enter into negotiations for the use of shredded rubber tyres as an alternate fuel in the production of clinker. The objective of this MoU is consistent with CMSB’s commitment towards its sustainability programme.

Before the event came to a close, CMSB Group Executive Director, Datuk Syed Ahmad Alwee Alsree also presented cheques worth RM20,000.00 to each of the four schools located in and around Mambong, namely SK St Francis Xavier, SK St Augustine, SK Sitang Petag and SJK Chung Hua Batu 15.

Launch of Samalaju Resort Hotel

Samalaju Resort Hotel Opens its Doors Marking New Era for SCORE

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Kuching (Sarawak), Tuesday, 18 October 2016 – Samalaju Properties Sdn Bhd (SPSB), a joint-venture company between two of Sarawak’s leading private sector companies, Cahya Mata Sarawak Berhad (CMS) and Naim Holdings Berhad (NHB), together with Sarawak Government Agency the Bintulu Development Authority (BDA), today launched the opening of the Samalaju Resort Hotel. The launch was led by the majority shareholder, CMS, which is credited as being one of the major catalysts in Sarawak’s continued economic growth and as a leading player in the Sarawak Corridor of Renewable Energy (SCORE). Officiating the on-site launch was His Excellency, Yang di-Pertua Negeri of Sarawak, Tun Pehin Sri Haji Abdul Taib Mahmud and CMS Group Managing Director, Dato’ Richard Curtis.

The 23-acre hotel and resort is strategically located within the Samalaju Industrial Park (SIP) and is set along the cliffs of Tanjung Similajau, with breath-taking views of both the South China Sea and the SIP. Targeted at short-term and longer-term guests, the hotel is arguably the State’s only truly holistic business-cum-leisure resort, billed to offer guests ease of access to the business activities of the industrial park, combined with international-standard hotel business facilities and connectivity with comfort at its core, all set within a unique landscape where industry meets with nature. Nearby tourist hot spots include the Similajau National Park – home to some of the State’s most iconic flora and fauna, including gibbons, banded langurs, long-tailed macaque and the hornbill, the State bird of Sarawak. Other famous nearby tourist destinations include the breathtaking Niah National Park and Limestone Cave, which is currently under review as a UNESCO World Heritage Status and the Loagan Bunut National Park.

CMS Group Managing Director, Dato’ Richard Curtis, said: “The hotel opening its doors represents a huge milestone for Samalaju, for SCORE and for Sarawak’s greater plan to continue on its growth path that is delivering opportunities and unrivalled development for Sarawak and its people. Development is of course the net product of economic growth, but is also inexorably linked to other factors: the comfort and lifestyle of our people and visitors, a sustainable and environmentally-friendly outlook and a drive for success with a responsible approach and a primary consideration for the communities in which we operate. This is the only resort of its type in Sarawak and is indicative of the growth of SCORE, the development of the Samalaju Eco Park and the demand from the nearby SIP to accommodate the individual needs of residents, expatriates, employees, contractors, visitors, investors and others who are connected with the State’s economic development.

“The cut and thrust of growth and development doesn’t mean that we must compromise on peace and tranquility and the opportunity to experience the natural beauty of our State. Work can become leisure. Corporate doesn’t have to mean concrete jungle. You can do what we have done, which is to work in synergy with nature and the environment to create an oasis of serenity.”

The 175-room resort-hotel is equipped with all the necessary amenities for both business travellers and those looking for a comfortable getaway, including swimming pools, a gym and games room, meeting and function rooms, a coffee house, a lounge and a business centre. The hotel is also equipped to organise corporate events, training, meetings and team building exercises, making it an excellent training centre for both the private and public sectors.

Under development is the nearby Samalaju Central project, which will offer guests even greater facilities, services and entertainment. Built up over 33 hectares, Samalaju’s first commercial service centre will provide retail, commercial and industrial units to both small and medium enterprises. When finished, Samalaju Central will offer restaurants, laundromats, mini-markets, clinics, a police station, BOMBA and much more, enhancing the lifestyles and facilities available to everyone in the area.

“The Samalaju Industrial Park currently stands at approx. 8,000 hectares, and with 16 approved projects and investment totalling RM25.3 billion, it continues to grow and expand, creating an increased need for facilities that meet the needs of a diverse and varied workforce. With massive plants and further development in the pipeline, there has never been a better time for the Samalaju Resort Hotel,” added Dato’ Richard Curtis.

His Excellency The Governor of Sarawak, Tun Pehin Sri Haji Abdul Taib Mahmud officiates the opening of Samalaju Resort Hotel