Stay abreast with the latest happenings in Cahya Mata Sarawak Berhad.

CMS posts RM84 million in PBT for 1Q 2022

/in , /by

Kuching (Sarawak), Wednesday, 18 May 2022 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) is pleased to announce that the Group recorded revenue of RM214.04 million for the first quarter ended 31 March 2022 (“1Q 2022”), an increase of 6% compared with the preceding year’s corresponding quarter’s (“1Q 2021”) revenue of RM202.06 million.

The Group’s profit before tax (“PBT”) of RM83.86 million in 1Q 2022 improved by RM1.30 million in comparison with 1Q 2021’s PBT of RM82.56 million mainly due to better performance recorded by the Cement and Road Maintenance Divisions and higher share of results of associates by RM15.42 million. The core earnings reported for 1Q 2022 were considerably better as the PBT reported in 1Q 2021 also included one-off gains coming from the disposal of shares in Kenanga Investment Bank Berhad (KIBB) amounting to RM28.52 million and disposal of land and investment properties of RM12.74 million. Furthermore, as at 1Q 2022, the Group’s Net Tangible Asset (NTA) per share is RM2.87. 

Despite challenges stemming from the higher raw material costs and global supply-chain constraints, the Group’s key initiatives continued to be implemented across all business divisions in response to the gradual recovery of the economy and to sustain the business. The Group achieved the following results for 1Q 2022: 

The Cement Division reported a 7% increase in revenue of RM136.64 million and 34% higher PBT of RM29.15 million in 1Q 2022 as compared to revenue of RM128.17 million and PBT of RM21.74 million in the previous corresponding quarter. The higher profits in 1Q 2022 was mainly attributable to the improved demand for cement and continual cost control measures implemented by the Division. 

The Trading Division reported a PBT of RM0.95 million, a decrease of 45% in comparison to 1Q 2021’s PBT of RM1.72 million. The lower PBT in 1Q 2022 was due to delay in the take up of telecommunication products and the recent price hike in construction materials that led to lower customer orders.

The Road Maintenance Division reported a 36% higher revenue of RM36.3 million and 500% increase in PBT of RM10.04 million in 1Q 2022 over previous year’s corresponding quarter revenue of RM26.73 million and PBT of RM1.67 million. 

The Property Development Division reported a higher PBT of RM6.74 million in 1Q 2022 in comparison to PBT of RM2.90 million in 1Q 2021 despite recording an 8% lower revenue. Higher PBT in 1Q 2022 was mainly due to a downward revision of costs for various projects.

Phase 1 of the integrated phosphate complex is still under construction in 1Q 2022 and it is scheduled for commissioning in the third quarter of 2022. The decrease in gross loss before tax was mainly due to lower unrealised foreign exchange loss of RM1.91 million in the current quarter as compared to RM9.20 million loss in 1Q 2021 arising from conversion of borrowing denominated in US dollar. 

The Strategic Investments share of profits from its associates in 1Q 2022 was higher in comparison to 1Q 2021, mainly due to better performance of an associate by RM19.55 million. 

The Group had also paid in full its Islamic Medium Term Notes of RM500.0 million in nominal value on its scheduled maturity date of 5 May 2022, via its internal funds. With the redemption, there are no outstanding Islamic Medium Term Notes under its Sukuk Programme of up to RM2.0 billion in nominal value.

Cahya Mata Sarawak will continue to safeguard the health of employees, vendors and customers even as its business divisions ramp up operations and at the same time, ensure robust governance practices are implemented through the roll-out of accountability and risk-management procedures. The Group will continue to seek opportunities for sustainable long-term growth as the business outlook improves in the coming months on stronger economic growth supported by domestic activities and external demand. 

As at close of business on 18 May 2022, the Group’s share-price is RM1.09.

CMS paid in full its Islamic medium term notes under Sukuk Programme rated AA3/Stable by Ram Ratings

/in , /by

Kuching (Sarawak), Friday, 13th May 2022 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) is pleased to announce that it had paid in full its Islamic Medium Term Notes of RM500.0 million in nominal value on its scheduled maturity date of 5 May 2022, via its internal funds. With the redemption, there are no outstanding Islamic Medium Term Notes under its  Sukuk Programme of up to RM2.0 billion in nominal value.

RAM Rating Services Berhad (“RAM Ratings”) has also assigned a AA3/Stable rating for the Group’s Sukuk Programme. The reaffirmation reflects RAM Ratings’ expectation that as the sole cement manufacturer in Sarawak, CMS’s operating performance will gradually improve as it directly benefits from the pick-up in Sarawak’s construction activities. RAM Ratings added that CMS’s financial profile, particularly its cashflow debt coverage, is anticipated to improve steadily in the immediate two years to stay commensurate with its ratings. Furthermore, it notes that positive remedial measures have been undertaken by the board to strengthen the Group’s internal controls and risk management. 

On 5 May 2017, CMS made its first issuance of sukuk amounting to RM500 million mainly for financing the capital expenditure and working capital requirements. Moving forward, the Group will be looking to tap into more ESG based funds to match its long-term funding requirements on its related projects and improve earnings across the business verticals.

CMS ventures into energy sector with the acquisition of Scomi Energy’s oilfield group

/in , /by

Kuching (Sarawak), Thursday, 17 March 2022 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) is pleased to announce that two of its subsidiaries, Cahya Mata Oiltools Sdn Bhd (“Oiltools”) and Oiltools International Sdn Bhd (“Oiltools International”), today entered into four (4) conditional sale and purchase agreements (“SPA”) with Scomi Energy Services Berhad (“Scomi Energy”) to acquire Scomi Oilfield Ltd (“Oilfield”) together with various companies1 and assets within the Oilfield Group of Companies (“Oilfield Group”) for a total purchase consideration of RM21.0 million.

The proposed acquisitions, which are expected to be completed in the third quarter of 2022, represent a strategic investment with potential synergy with the Group’s existing businesses as well as the opportunity to diversify into the global energy sector and grow its revenue and earnings.

Scomi Energy, via the Oilfield Group, is one of the top five global providers of drilling support services and products for the oil and gas industry. It offers drilling fluids services and drilling waste management services. Scomi Energy has a presence in 15 markets across Asia, Middle East, Europe and Africa with an ongoing order book.

The CMS management expects to leverage Oilfield Group’s global presence to expand the Group’s clientele and serve as a bridge for the expansion of its existing businesses into the markets where the Oilfield Group has a presence.

The Group’s push into sustainability as a business strategy will benefit from Oilfield Group’s waste management services business and this business is expected to grow due to increasing drilling activity as crude prices remain elevated. The additional benefit from the proposed acquisitions is that the Group will not take on additional debt while drilling and waste management services are asset-light businesses. The asset light structure will be the core business operating model for future growth.

After weighing the risks and opportunities, the management considers the proposed acquisitions as a timely strategy to diversify into the global energy sector as there is potential for Oiltools to become an important contributor to CMS from the increase in overall drilling activities due to increased demand for oil and gas as well as the restructuring of the global energy supply chain.

The first SPA is for the acquisition of Oilfield and its nine subsidiaries as well as a 48% equity interest in Scomi KMC Sdn Bhd (“Scomi KMC”) from Scomi Energy for a cash consideration of RM13.5 million. The second SPA involves Oiltools International acquiring from Scomi Oiltools Sdn Bhd (Receiver & Manager appointed) (“SOSB”) a 4% equity interest in Scomi KMC, 25% equity interest in Scomi Oiltools Gulf W.L.L. and 25% equity interest in Continental Wire Cloth (Malaysia) Sdn Bhd (formerly known as Global Oilfield Products Sdn Bhd) for a cash consideration of RM2.6 million. Through the first and second SPAs, Oiltools will hold 52% equity interest in Scomi KMC.

The third SPA is for the acquisition of a 5-storey shop office located in Dataran Prima, Petaling Jaya, Selangor by Oilfield International from SOSB while the fourth SPA is for Oilfield International’s acquisition of the inventory and equipment from SOSB for a total cash consideration of RM3.0 million and RM1.9 million respectively.

Cahya Mata Sarawak posts RM203 million in PATNCI on revenue gains from improved business operations: Profitability supported by gains on disposal of several assets

/in , /by

Kuching (Sarawak), Friday, 25 February 2022 – Cahya Mata Sarawak Berhad (“CMSB” or “the Group”) is pleased to announce that the Group recorded profit after tax and non-controlling interests (“PATNCI”) of RM203.41 million for the financial year ended 31 December 2021 (“FY2021”). This was an increase of 4% compared with the RM194.81 million registered in the financial year ended 31 December 2020 (“FY2020”). The results recorded in FY2021 were on the back of an improved revenue of 7% to RM813.80 million compared with RM762.79 million reported in FY2020.
The improved performance was attributable to gains on sale of shares in an associate amounting to RM28.52 million, gain on disposal of property of RM16.99 million, coupled with improvements in associates’ and joint ventures’ performances by RM142.90 million.

Cahya Mata Sarawak is implementing growth strategies across all business divisions as the economy rebounds following its gradual reopening despite challenges from global supply-chain constraints.

The Group achieved the following results for FY2021:

The Cement Division’s improved performance was largely attributable to the lifting of the MCO and opening of the economy in FY2021. As a result, the 22% increase in the clinker plant’s production days in FY2021 enabled the Division to record a revenue of RM483.24 million and Profit Before Tax (“PBT”) of RM61.63 million. The Division faced margin pressures throughout 2021 due to supply chain constraints, including raw materials and logistics price increases.
The Trading Division reported PBT of RM6.11 million, an increase of 60% in comparison to FY2020’s PBT of RM3.83 million. The higher PBT was due to higher sales in all its product segments.

The Road Maintenance Division reported lower revenue of RM119.72 million as compared to RM129.89 million in FY2020 due to lower work done. PBT contracted by 51% to RM9.44 million from RM19.14 million due to drop in gross margin and higher administrative expenses.

The Property Development Division’s revenue increased by 61% to RM114.26 million led by higher sales in properties, together with improved revenue from lodges and hotel businesses. As a result, the PBT attributable to this Division in FY2021 increased to RM32.08 million as compared to loss before tax (LBT) of RM5.33 million the year before.

The Malaysian Phosphate Additives Sarawak (“MPAS”) project which has faced delays in commissioning due to the pandemic, the availability of foreign workforce and supply chain disruption has not been progressing as scheduled. The Group is taking proactive measures to commission the plant and continues to evaluate all options on the future direction of the MPAS project.

Strategic Investments share of profits from its associates in FY2021 was RM158.52 million as compared to RM48.28 million reported in FY2020. This was mainly due to better performances from an associate by RM111.46 million as it had incurred a loss amounting RM23.73 million in FY2020.

In FY2021, the share of results of joint ventures were RM33.38 million, contributed mainly by SEDC Resources Sdn Bhd (“SEDCR”) Group. SEDCR’s improved revenue and gross profit in FY2021 was due to higher sales and a reversal of an impairment of RM6.80 million.

Cahya Mata Sarawak will continue to adhere to strict standard operating procedures to safeguard the health of employees, vendors and customers as the Group’s business divisions ramp up operations. While business is expected to improve further in the coming months, the management will continue to seek opportunities for sustainable long-term growth while ensuring that robust governance practices remain a priority with key initiatives in governance, accountability and risk management to be rolled out.

CMS Cement Industries raises cement prices for the first time since 2016: First adjustment in six years due to significant rising costs

/in , /by

Kuching (Sarawak), Saturday, 12 February 2022 – CMS Cement Industries Sdn Bhd (“CMSCI”), a wholly-owned subsidiary of Cahya Mata Sarawak Berhad (“CMSB” or “the Group”), has announced today that the price of cement will be adjusted by an average of 10% (subject to product types and location) effective 17 February 2022 due to significant and sustained rising cost of raw and packaging materials and freight charges. Over the year  cement production cost has increased by an average of  9% and, in view of the current macro-environment, CMSCI expects its production costs to continue on an upward trend.

CMSCI has had to raise the price of cement after absorbing cost increases over the last six years as there has been a steep rise in global dry bulk freight rates, with the benchmark Baltic Dry Index showing rates having risen by 64% in 2021 while the sack kraft paper index has risen by 33% during the same period, which in turn has increased packaging costs for the cement industry.

Following the price adjustments, the average unit price of cement in Sarawak remains competitive compared with other regions in Malaysia, especially now as prices of cement in both Sabah and Peninsular Malaysia have been increasing over the last several months. As a further comparison, the prices of other building materials such as steel have also surged across the board since January 2021. The Building Materials Cost Index (BCI) has increased by 2.3% in Peninsular Malaysia, while the BCI saw increases of 2.1% and 1.5% in Sabah and Sarawak respectively during this period.

Since 2016, CMSCI has maintained the selling price of cement and absorbed any increases in production costs due to its commitment to supporting the development and growth of Sarawak’s infrastructure, but the recent rise in costs makes increasing the price of cement unavoidable in order to sustain the quality of its products and services. CMSCI intends to maintain its customer-centric and supplier-focused role as the leading provider of quality cement in Sarawak while sustaining excellence in operations.

Moving forward, CMSCI plans to further expand its range of eco-friendly cement products in the market. In addition to the Portland Limestone Cement (PLC 32.5N) launched in 2019, CMSCI will also be launching the Portland Composite Cement (PCC 42.5N) in the second half of 2022. PCC 42.5N is categorised as blended cement and features the same strength class as the Portland Cement 42.5N. Through these product offerings, CMSCI is able to provide customers with a range of cement product types to meet their various project requirements at different price points.

At the Group level, CMSB remains committed to supporting Sarawak’s development plans including the vision of becoming a developed State by 2030. As one of the key local private sector investors and a major supplier of construction materials and services in the State, the Group reassures all stakeholders that the price adjustment was implemented only after careful deliberations.