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

CMS Posts PBT of RM140 million for 1H2021

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Kuching (Sarawak), Monday, 30 August 2021 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) announced today that it closed six months ended 30 June 2021 (“1H2021”) with profit before tax (“PBT”) of RM140.0 million as compared to RM36.6 million in the same period of the preceding year (“1H2020”).

The increased profits compared to prior corresponding period were largely attributable to gains on disposal of Kenanga Investment Bank shares of RM28.5 million, gain on disposal of land of RM12.7 million, and improved performance of associates by RM29.2 million. Traditional core businesses also improved their performance due to the opening of economic activities with the selective easing of the Movement Control Order (“MCO”) as compared with the corresponding period where business experienced nationwide lockdown in 2Q2020 when the pandemic intensified.

The economic environment continues to be challenging with the recent upsurge in the Covid-19 infections nationwide which may delay the full opening of economic activities nationwide, especially on all the traditional core businesses. Increased cost pressures will come from logistics and materials, the impact of which the Group will take measures to mitigate. The performance of the coming quarters will depend on the speed of the progress of Malaysia’s National Recovery Plan (NRP), and early signs have indicated positive results from the rapid vaccination programme of the Government.

The Group achieved the following results over the six months ended 30 June 2021:

The Cement Division’s 1H2021 revenue improved by 22% to RM237.8 million as compared to RM195.3million in 1H2020. The PBT of RM41.5 million compared to RM18.9 million in the same period of the previous year was achieved on the back of increased construction activities due to the easing of the MCO 3.0.

The Trading Division reported revenue of RM48.8 million in 1H2021, an improvement of 52% compared to 1H2020. The Division (excluding the share of joint ventures) posted a PBT of RM2.7 million as compared to PBT of RM0.7 million in 1H2020. The higher PBT is due to increased sales to the Public Works Department and profit recognition on a telecommunications tower project.

The Road Maintenance Division reported lower revenue of RM53.8 million as compared to RM69.4 million in the corresponding period of 1H2020. Gross profit margins were impacted by higher costs attributed to unfavourable ground conditions in a project. This impacted the Divisions PBT by a 37% drop to RM4.5 million from RM7.1 million for the corresponding 1H2020.

The Property Development Division’s revenue increased by 74% to RM50.3 million mainly due to higher number of properties sold in 1H2021 in Bandar Samariang. As a result, profit attributable to this Division increased to RM11.3 million.

Strategic Investments share of profits from its associates increased to RM61.1million in 1H2021, 92% higher compared to the RM31.9 million in 1H2020. The higher share of profit was mainly due to higher contribution from Kenanga Investment Bank, with contribution of RM12.1 million in 1H2021 in comparison to a contribution of RM3.6 million in 1H2020.

In 1H2021, the share of results of joint ventures were RM12.8 million, which were contributed mainly by SEDC Resources Sdn Bhd (“SEDCR”) and PPES Works (Sarawak) Sdn Bhd (“PPESW”). Arising from the disposals of 2% equity interest in SEDCR and PPESW, the Group now recognises 49% held as its share of results of the joint ventures.

The Malaysian Phosphate Additives Sarawak (“MPAS”) project has not been progressing as scheduled   due to technical   and   commissioning   issues, the extent of which are being assessed and solutions being actively worked at. The Company is evaluating all options on the future direction of the MPAS project.

Overall, the Group is well positioned to achieve sustainable long-term growth notwithstanding the uncertainties and vagaries of the pandemic continuing to weigh down on global economic growth. It will be closely monitoring the opening of the economy to take advantage of recovery growth areas and new business opportunities.

Cahya Mata Sarawak Berhad Announces Appointment of Dato Sri Sulaiman Abdul Rahman Abdul Taib as Managing Director of the Group and the Redesignation of Dato Isaac Lugun as Non-Independent, Non-Executive Director of the Group

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Kuching (Sarawak), Thursday, 8 July 2021: Cahya Mata Sarawak Berhad (“the Group”) today announced the appointment of Dato Sri Sulaiman Abdul Rahman Taib as Managing Director, and the redesignation of Dato Isaac Lugun as Non-Independent, Non-Executive Director effective 8 July 2021.

“We are pleased to welcome Dato Sri Sulaiman Taib to lead the Group,” said Tan Sri Abdul Rashid Manaf, Group Chairman Cahya Mata Sarawak Berhad. “Sulaiman’s familiarity with Cahya Mata Sarawak Berhad and his wide-ranging experience in businesses will be invaluable to Group as we consolidate, streamline, and move the Group toward a new growth path, post pandemic”, added Tan Sri Abdul Rashid in welcoming Dato Sri Sulaiman to helm the Group. Tan Sri Abdul Rashid further added “this transition is due to early retirement of Dato Isaac, who, will continue to be with the Group as Non-Independent, Non-Executive Director.

Dato Sri Sulaiman brings with him a wealth of experience in banking, finance, and insurance, having been the Executive Chairman of RHB Capital Berhad and its group of companies. While there, Dato Sri chaired several of the Boards and Committees including Rashid Hussain Berhad, RHB Insurance Berhad, RHB Asset Management Berhad and RHB Research Institute, apart from being a Board member of RHB Islamic Bank Berhad, RHB Sakura Bankers Berhad, and RHB Bank Berhad. During this period, he was also appointed by the Government on the board of Malaysian Industry Government Group for High Technology (MIGHT).

He is also experienced in manufacturing, property development, stock broking, and is familiar with Cahya Mata Sarawak Berhad, having served in various capacities there from 1995 to 2008. During his 13-year tenure, he assumed various positions including that of Group Chairman, and Group Executive Director.

In the Cahya Mata Sarawak Bhd Group, Dato Sri was Chairman of CMS Property Development S/B, and CMS Works International Ltd. Alongside, he was also the board member of Utama Banking Group Berhad, K&N Kenanga Holdings Berhad, Bank Utama (Malaysia) Berhad, and Utama Merchant Bank Berhad.

He then went on to become a Member of the Malaysian Parliament after being successfully elected in Kota Samarahan constituency in 2008. He served with the Federal Government when he was Deputy Minister of Tourism. After fulfilling his political term, Dato Sri Sulaiman then ventured abroad to oversee various private investments over the last few years.

CMS Registers PATNCI of RM77.8 Million for 1Q2021

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Kuching (Sarawak), Tuesday, 25 May 2021 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) announced its first quarter financial results for the three months ended 31 March 2021 (“1Q2021”) today, reporting profit after tax and non-controlling interests (“PATNCI”) of RM77.8 million. This was a vast improvement of 350% as compared to PATNCI of RM17.3 million in the similar quarter of the preceding financial year (“1Q2020”).

The Group posted revenue of RM202.1 million and a profit before tax (“PBT”) of RM82.6 million in comparison to 1Q2020’s revenue of RM189.4 million and PBT of RM18.1 million. Revenue increased due to higher contributions from the Cement, Trading and Property Development Divisions. Higher PBT was primarily driven by a gain in disposal of 46.60 million shares in Kenanga Investment Bank amounting to RM28.5 million, gain on disposal of land of RM12.7 million and improvements in associate’s performance. Associate companies’ contribution increased by 166% to RM30.3 million compared to RM11.4 million in 1Q2020.

Commenting on the Group’s 1Q2021 performance, CMS Group Managing Director, Dato Isaac Lugun said: “Our 1st quarter results were extremely commendable in light of the fact that traditionally the 1st quarter has always been the worst performing quarter for all the past years, and for this quarter it is also achieved against a challenging backdrop of new waves of the pandemic surfacing. I am heartened at the resilience of our people in turning things around despite the daunting challenges we faced. The team has been laser-focused in implementing catch-up strategies across the Group once we were allowed to resume operations after the MCO. Even after disregarding the various gains on disposal, our PBT improved by 128%.”

The CMS Group achieved the following results over the three months ended 31 March 2021:

The Cement Division’s 1Q2021 revenue improved by 7% to RM128.2 million as compared to RM120.2 million in 1Q2020. The increase in PBT of 17% outpaced increase in revenue. PBT grew from RM18.6 million in 1Q2020 to RM21.7 million in 1Q2021 mainly due to lower clinker purchase price and operating costs which led to lower cost of cement production.

The Cement Division is aiming to further improve its clinker production with its medium-term goal of achieving volumes of 700,000 metric tonnes (MT) and above annually, and to eventually operate at volumes of around 800,000 MT annually by 2023 and beyond. Despite the disruptions stemming from the various phases of the MCO we occupy a strong market position as Sarawak’s sole cement manufacturer and expect to benefit from the implementation of construction packages throughout the State.

The Construction Materials Division, a 49% joint-venture under SEDC Resources Sdn Bhd (“SEDCR“), reported revenue of RM84.9 million in 1Q2021, an improvement of 49% compared to 1Q2020. It posted PBT of RM15.5 million, an increase by 163% in comparison to 1Q2020’s PBT of RM5.9 million, mainly due to higher production volume and lower bitumen cost. The Division is expected to remain strong in year 2021 due to continuing demand for quarries and premix products. With current portfolio of 4 quarries with approximately 4 million MT/annum production, the Division is best positioned to support the State Government in realising its development plans. The management is also looking to increase its quarry assets by expanding their capacity and new sites across the State.

The Trading Division reported revenue of RM27.9 million in 1Q2021, an improvement of 32% compared to 1Q2020. This Division posted PBT of RM1.7 million, an increase of 108% in comparison to 1Q2020’s PBT of RM0.8 million. The higher PBT in 1Q2021 was due to better margins from higher sales to water treatment project and profit recognised on a telecommunications tower project. The Division is on a strong footing to capture opportunities from the infrastructure developments in the State especially with several mega infrastructure projects underway or in the pipeline.

The Construction Division, a 49% joint-venture under PPES Works (Sarawak) Sdn Bhd (“PPESW“), reported revenue of RM99.5 million in 1Q2021, an improvement of 27% compared to 1Q2020. This Division posted PBT of RM2.3 million, lower by 17% in comparison to 1Q2020’s PBT of RM2.8 million, due to lower gross profit margin and lower interest income earned. The Division has recently been awarded the data collection scope of works for the “Proposed Long Term Management and Maintenance of State Roads”. PPESW is working alongside with the Road Maintenance Division on this project. The order book excluding road concessions was RM1.03 billion as at 31 March 2021. Together with SEDC, we are making every effort to bolster its competitive edge as it bids for new projects related to Sarawak’s Coastal Road Network and the Second Trunk Road projects to grow the current construction order book.

The Road Maintenance Division reported a slightly lower revenue of RM26.7 million as compared to RM28.0 million in 1Q2020. Gross profit margin was mainly impacted by unexpected costs due to unfavourable on-site ground conditions in a project. Accordingly, this Division reported a lower PBT of RM1.7 million in 1Q2021, which was 48% lower than 1Q2020’s PBT of RM3.2 million. Meanwhile, the Road Maintenance Division has managed to procure RM5.8 million worth of Instructed Works from JKR Sarawak. In addition, management is in active negotiations with JKR Sarawak to procure Design and Build contracts.

The Property Development Division’s revenue increased by RM3.6 million to RM22.0 million mainly due to the higher number of properties sold in 1Q2021 especially in Bandar Samariang. The Property Division’s PBT for 1Q2021 declined by 34% despite a 20% increase in revenue due to a recognition of gross profit amounted to RM4.4 million for land compensation received from the Sarawak Government in 1Q2020. The Property Division’s focus for the immediate future is on developing affordable housing at Bandar Samariang. This Division aims to leverage on the current resilience of this market segment given the current lacklustre commercial property market.

For the 1Q2021, share of profits from its associates from the Group’s Strategic Investments increased by 166% to RM30.3 million from RM11.4 million in 1Q2020 on the back of solid performances by all the Group’s associate companies.

Commenting on CMS’ outlook and prospects moving forward, Dato Isaac Lugun said: “With a clear growth strategy, strengthened leadership including at the Board level and closer collaboration with the State Government through SEDC, the Group is well positioned for sustainable long-term growth albeit the unprecedented threat posed by the COVID-19 pandemic which continues to linger.”

CMS Reports PATNCI of RM195 Million for FY2020

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Kuching (Sarawak), Thursday, 25 February 2021 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) announced its fourth quarter financial results for the three months ended 31 December 2020 (“4Q2020”) today, reporting full year profit after tax and non-controlling interests (“PATNCI”) of RM194.71 million for the financial year ended 31 December 2020 (“FY2020”). This was a 22% improvement as compared to PATNCI of RM159.46 million in the preceding financial year ended 31 December 2019 (“FY2019”).

In respect of 4Q2020, the Group registered a slight decline in revenue by 9% to RM206.72 million compared to RM226.10 million in 3Q2020 (restated). PATNCI for the quarter was RM114.01 million which is an increase of 2418% compared to 4Q2019. The increase was mainly attributable to a remeasurement gain from the disposals of interests in SEDC Resources Sdn Bhd (“SEDCR”) and PPES Works (Sarawak) Sdn Bhd (“PPESW”). Back in October 2020, we completed the 2% equity sale in SEDCR and PPESW for a total cash consideration of RM17.50 million to Sarawak Economic Development Corporation (“SEDC”), hence the revenue contribution has been deconsolidated since October 2020.

Commenting on the Group’s FY2020 performance, CMS Group Managing Director, Dato Isaac Lugun said: “The impact of the unprecedented COVID-19 pandemic on our financial performance for 2020 was significant. It was, however, cushioned by two factors: firstly, our strong cash position and low gearing – a discipline that we will maintain as we continue to navigate the ongoing challenges of the pandemic. Secondly, our diverse business portfolios have a positive counterbalancing impact where the poor performance of our cement, construction and property businesses were, to an extent, counterbalanced by the good performance of our associate companies. The core PATNCI for the Group was RM99.73 million for FY2020. However, there was a remeasurement gain and gain on disposals totalling RM162.95 million from the sell-down of 2% stake in PPESW and SEDCR to SEDC. In keeping with prudent practice, we had provided for impairments in relation to property, plant, equipment and trade receivables across our businesses particularly in our Property Development and Phosphate Divisions. This has resulted in a strong PATNCI of RM194.71 million reported for FY2020 for the Group.”

The CMS Group achieved the following results for the financial year ended 31 December 2020:

The Cement Division’s FY2020 revenue declined by 21% to RM476.03 million as compared to RM601.62 million in FY2019. Consequently, the Division’s PBT dropped by 34% to RM48.44 million compared to RM73.11 million in the same period of the previous year. The softer performance was mainly due to lower contribution from both cement and concrete business as a result of fewer operational days in FY2020. The Division implemented various measures which resulted in improved operational efficiency from lower repair and maintenance cost, discharging cost as well as lower costs associated with imported clinker. Furthermore, this Division is well positioned to capitalize on opportunities in the potential spike of major infrastructure projects in the State.

The Construction Materials & Trading Division completed the disposal of 2% of SEDCR to SEDC in 4Q2020.   Post completion, CMS held a 49% joint venture (“JV”) stake in SEDCR and will continue to manage SEDCR’s day-to-day operations. As such, results from SEDCR prior to the disposal were presented as discontinued operations.  Post disposal, CMS only includes its share of PATNCI of SEDCR as share of results in  JVs. For this Division, PBT was lower as compared in FY2020 due to softer performance from the trading and wire operations. As for the discontinued operations (SEDCR) PAT for FY2020 of RM34.25 million was lower than FY2019’s RM65.58 million. Higher PAT in FY2019 was mainly due to a reversal of provision of RM14.83 million for the soil erosion remedial action.

Given that SEDC, CMS’ JV and long-standing strategic partner, has recently been entrusted with a more catalytic role in the State’s economic development, this transaction will put CMS on a stronger footing to capture opportunities from the infrastructure developments in the State especially with several mega infrastructure projects in the pipeline.

The Construction & Road Maintenance Division completed the disposal of 2% of PPESW to SEDC in 4Q2020. For its continuing operations, revenue decreased by 47% to RM129.89 million as compared to RM244.67 million in FY2019. Accordingly, PBT (including the share of results of PPESW Group) declined by 60% to RM14.80 million.  The road length maintained effective 1 January 2020 was almost half of that maintained previously but the scope was more extensive under the new contract. For the discontinued operations (PPESW) PAT of RM9.96 million was higher compared to RM4.29 million in the FY2019. The Division’s mid-term prospects, however, are well supported by its outstanding order book of RM1.03 billion as at 31 December 2020. The Division is well positioned to capitalize on opportunities to participate in major infrastructure projects in the State of Sarawak including the Coastal Road and Second Link Road Projects.

The Property Development Division’s FY2020 revenue declined by 47% to RM71.31 million in comparison to RM135.79 million in FY2019. This was mainly due to a drop in the number of property sales and lower land value sold in FY2020. Profitability was also impacted by an impairment and project cost written-off of RM11.26 million and RM5.19 million, respectively.

For the Phosphate Division, the integrated phosphate complex (Phase 1) is still under construction as at 31 December 2020. Losses for the year was due to an impairment on property, plant and equipment amounting to RM51.75 million in relation to the construction of Phase 2 of the phosphate complex.

For the FY2020, share of profits from its associates from the group’s Strategic Investments decreased by 17% to RM48.59 million from RM58.40 million in FY2019. We are hopeful that our commodities businesses will perform better in 2021 amid higher commodity prices.

Commenting on CMS’ outlook and prospects moving forward, Dato Isaac Lugun said: “With our clear growth strategy, strengthened leadership, a closer collaboration with the State Government through the sell-down of 2% stake at PPES Works and SEDC Resources to SEDC, the Group is emerging stronger from the Covid19 pandemic and is well positioned to benefit from the State Government’s strong infrastructure development agenda. We are cautiously optimistic that we will be able to deliver satisfactory performance in 2021.  Despite a challenging year, we are committed to reward our shareholders and have proposed a final dividend of 2.0 sen per share in respect of FY2020.”

CMS Reports PBT of RM81.7 Million in 3Q2020

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Kuching (Sarawak), Wednesday, 25 November 2020 – Cahya Mata Sarawak Berhad (“CMS” or “the Group”) announced its third quarter financial results for the three months ended 30 September 2020 (“3Q2020”) today, reporting profit before tax (“PBT”) of RM81.7 million which is a 255% improvement as compared to PBT of RM23.0 million in the preceding second quarter ended 30 June 2020 (“2Q2020”).

The Group registered significant improvement in both revenue and PBT in 3Q2020 compared to the previous quarter, as most of its businesses were back in full operation. The Group posted revenue of RM428.4 million and a PBT of RM81.7 million in comparison to 2Q2020’s revenue of RM206.8 million and PBT of RM23.0 million. All traditional core businesses registered improvement in both revenue and PBT contributions. However, associate companies’ contribution decreased by 38% to RM12.7 million compared to RM20.5 million in 2Q2020.

For the nine months ended 30 September 2020 (“9M2020”), the Group posted total revenue of RM917.7 million and a PBT of RM131.5 million which translates to a 29% and 43% dip respectively in comparison to 9M2019’s revenue of RM1.3 billion and PBT of RM230.9 million. This was a result of fewer operating days across our traditional core businesses during the MCO period earlier this year when operations were interrupted for about 2 months.

Commenting on the Group’s 3Q2020 performance, CMS Group Managing Director, Dato Isaac Lugun said: “Our revenue and profitability improved significantly this quarter as we moved towards full operations and recorded improvements across all traditional core business as compared to 2Q2020. We are pleased that our catch-up strategies have yielded results as reflected in our performance.

The CMS Group achieved the following results over the nine months ended 30 September 2020:

The Cement Division’s 9M2020 revenue declined by 25% to RM336.7 million as compared to RM448.5 million in 9M2019. Consequently, the Division’s PBT dropped by 34% to RM42.9 million compared to RM65.5 million in the same period of the previous year. The softer performance was mainly due to lower contribution from both cement and concrete business as a result of fewer operational days in 9M2020. The Division implemented various measures to reduce cost which resulted in improve operational efficiency from lower repair and maintenance cost, discharging cost as well as lower costs associated with imported clinker. Furthermore, this Division is well positioned to capitalize on opportunities in the potential spike of major infrastructure projects in the State.

The Construction Materials & Trading Division’s 9M2020 revenue declined by 25% to RM314.8 million while its PBT contracted by 26% to RM47.2 million compared to 9M2019. This Division recorded lower revenue from its quarry, premix, and trading sectors due to the lockdown. The year-on-year (YoY) drop in PBT was partially attributable to recognition of a one-off provision reversal amounting to RM9.0 million in 9M2019. On 2 October 2020, we completed the 2% equity sale in CMS Resources Sdn Bhd (“CMSR”), the holding company for its quarry and premix business to Sarawak Economic Development Corporation (“SEDC”). Post completion, CMSB will hold a 49% joint venture stake in CMSR and will continue to manage CMSR’s day-to-day operations. Given that SEDC, CMSB’s joint venture (“JV”) & long-standing strategic partner, has recently been entrusted with a more catalytic role in the State’s economic development, this transaction will put CMSB on a stronger footing to capture opportunities from the infrastructure developments in the State especially with several mega infrastructure projects in the pipeline.

The Construction & Road Maintenance Division’s 9M2020 revenue decreased by 28% to RM272.3 million as compared to RM378.6 million in 9M2019. This was due to lower contribution from both construction and road maintenance activities. Road maintenance revenue and gross profit margin decreased as the road length maintained effective 1 January 2020 was almost half of that maintained previously but the scope was more extensive under the new contract. Meanwhile, the lower revenue from construction business was mainly due to minimal construction works in 2Q2020 arising from lockdown. The Division’s PBT declined by 59% to RM21.9 million in 9M2020 from RM52.8 million in 9M2019. The Division’s mid-term prospects, however, are well supported by its outstanding order book of RM1.11 billion as at 30 September 2020. The Division is well positioned to capitalize on opportunities to participate in major infrastructure projects in the State of Sarawak including the Coastal Road and Second Link Road Projects.

The Property Development Division’s 9M2020 revenue declined by 51% to RM52.9 million in comparison to RM108.7 million in 9M2019. This was mainly due to drop in the number of properties sales and lower land value sold in 9M2020. Consequently, its PBT dropped by 74% YoY to RM6.9 million in 9M2020.

For the 9M2020, share of profits from its associates from the group’s Strategic Investments decreased by 20% to RM44.6 million from RM55.8 million in 9M2020.

Commenting on CMS’ outlook and prospects moving forward, Dato Isaac Lugun said: “We deem our performance this quarter to be satisfactory as all Divisions are focused on catching up with pending orders and works following the earlier lockdown closures.  We will continue to build on this momentum for the remainder of the year while taking prudent steps to enhance our cost control initiatives including managing and rationalizing capital expenditures. We intend to continue extracting value from our traditional core businesses by bolstering their overall operations and optimising efficiencies. We are implementing the necessary measures and will continue to adapt and fine-tune our strategies to safeguard the sustainability of our business for the long-term.”