Corporate results: IOI Corp, Pos Malaysia, Velesto Energy, UMW, Seacera Ceramics, SAM Engineering and Multi Sports

IOI Corp profit contracts 88% to RM246m
IOI Corp Bhd’s net profit contracted 88.1% year-on-year (YoY) to RM245.8 million for its third quarter ended March 31 this year due to the absence of a billion-ringgit disposal gain and lower plantation profit. This was against the RM2.07 billion profit made in the corresponding quarter last year that was boosted by the disposal of a 70% stake in Bunge Loders Croklaan Group BV which resulted in a RM1.66 billion gain on its books. The integrated edible oil producer also recognised lower net foreign exchange gains and plantation profit which was offset by higher contribution from its resource based manufacturer business. Revenue for the quarter was higher at RM1.89 billion – up 8.6% YoY. For the full year, net profit came in lower at RM585.1 million while revenue was up marginally at RM5.65 billion, its exchange filing on Tuesday noted. IOI stated its performance for the next quarter to be satisfactory despite weaker crude palm oil prices expectations and production and a weaker ringgit against the greenback.

Pos Malaysia ends fiscal year in the red
Pos Malaysia Bhd raked up a RM141.13 million net loss for its fourth quarter ended March 31, 2019, on lower revenue from its key postal and courier segments, higher operating expenses and impairments. In an exchange filing on Tuesday, the national postal service provider noted the 4Q earnings paled compared against the RM29.03 million profit achieved in the corresponding quarter last year. Revenue for the quarter fell 8.9% year-on-year (YoY) to RM594.68 million as turnover from its postal and courier services, which made up 65% of group revenue, came in lower due to declining mail volume. Its logistics and aviation businesses also turned in lower revenue for the quarter. Pos Malaysia further incurred RM39.6 million in impairment charges from the loss of goodwill in its logistics asset. For the full year, the company raked up RM165.74 million in losses while revenue 4.9% YoY lower at RM2.35 billion. Pos Malaysia stated its businesses remain challenging, particularly postal and courier services, due to the continued contraction in volume of mail which it has taken firm steps to address.

Velesto in the red in 1Q on absence of forex gain
Velesto Energy Bhd slipped to a RM22.22 million net loss for the first quarter ended March 31 this year (1Q19) despite revenue coming in stronger on higher rig utilisation and charter rates. Velesto made a profit of RM5 million in 1Q18, boosted by a RM18.2 million foreign exchange gain as losses from its drilling and oilfield businesses continued to drag earnings into negative territory. The oil and gas services provider did, however, grow its revenue by 4.3% year-on-year to RM127.03 million due to the higher utilisation of its drilling rigs (four out of seven were in use) and higher average charter rates recognised. In an exchange filing on Tuesday, the company noted its remaining three rigs will be mobilised on recently secured long term charters while it aggressively bids for new contracts to replace contracts expiring later this year and next year. Velesto expects to achieve an improved showing for the current financial year on continued support from rig utilisation and time charter rates.

UMW’s higher sales drive 1Q19 revenue 
UMW Holdings Bhd (UMW) posted a 14% year-on-year (YoY) increase in revenue to RM2.78 billion for its financial year ended March 31, 2019, on higher number of vehicles sold by its automotive segment and higher unit sales by the aerospace business. Net profit for the period declined by 12% YoY to RM140.7 million due to lower performance from the automotive and equipment segment. The automotive segment’s net profit was marginally lower underpinned by higher depreciation from a new plant which was partially offset by better performance from an associated company. The equipment segment’s net profit margin fell on competitive pricing for both the heavy equipment and industrial equipment businesses. Going forward, UMW intends to strengthen its three core businesses, namely Automotive, Equipment, and Manufacturing & Engineering.
The group also looking into cost optimisation initiatives to improve its business performance and operational productivity, its exchange filing on Tuesday noted. 

Seacera unit hit with fresh RM19m payment demand 
Seacera Ceramics Sdn Bhd, a wholly-owned subsidiary of Seacera Group Bhd has received a Letter of Demand, dated on May 15, 2019 from AmBank Islamic Berhad, seeking payment worth RM19 million. The payment demand includes future profit of total amount outstanding and due payable under the Murabahah Tawarruq Term Financing-i and Cashline-i.  In a filing to Bursa on Tuesday, Seacera stated it is required to make full settlement within seven days from May 15, 2019 to AmBank Islamic Berhad.

SAM Engineering’s net profit up growth in aero segment  
SAM Engineering & Equipment (M) Berhad recorded a 25% year-on-year (YoY) increase in net profit to RM78.51 million for the financial year ended March 31, 2019, due to higher profit contribution from its Aerospace & Equipment segment .The group, which specialized on semiconductors and electronic industries, saw its revenue rise 22% YoY to RM754 million supported by sales of casing products for new aircraft platforms – A320 Neo and B737 Max. In a filing to Bursa Malaysia on Tuesday, the company noted increase sales to customers from the HDD and semiconductor industry have drive the equipment’s segment revenue. The company expects demand in the hard disk drive storage segment to increase next quarter and aerospace industry to continue to bring stable revenue for the group.  

Multi Sports inks MoU to regularise financial condition
Multi Sports Holdings Ltd intends to incorporate a new company as part of efforts to regularise its finances and lift itself out of Practice Note 17 (PN17) status. In an exchange filing on Tuesday, the China based shoe manufacturer stated it has inked a memorandum of understanding with construction firm Southern Score Sdn Bhd (SSSB) to form a new company to take over and assume its listing status. This restructuring will further entail the reconstruction of its share capital if necessary and the capitalisation of its accrued liabilities (amounting to 4.06 million renminbi) and debts owed to creditors. The new company will also acquire SSSB’s entire issued share capital at a price to be mutually agreed upon a later date and to be satisfied through the issuance of new company shares worth up to RM15 million – RM6 million of which will be used to pay Multi Sports’ outstanding debt and liabilities. The arrangement is contingent on Bursa Malaysia Securities Bhd granting an extension for Multi Sports to submit its regularisation plan, which was last set on May 13 this year, as well securing approval from creditors.