KPS strengthens manufacturing segment following departure from utility business

By SHAHEERA AZNAM SHAH / Pic By TMR File

KUMPULAN Perangsang Selangor Bhd (KPS) is expected to focus on the manufacturing segment following its departure from the utility business with the disposal of its stake in Syarikat Pengeluar Air Selangor Holdings Bhd (Splash Holdings) in April.

KPS chairman Raja Shahreen Raja Othman (picture) said the realignment of the group’s diversified businesses allows KPS to expand its manufacturing segment while preparing for future acquisitions.

“We are continuously looking into what can be evaluated and incorporated into the group. The revision of the portfolio recently does not mean that we are going to stop, as the disposal of Splash Holdings has given us another avenue.

“If we are presented with a good deal, why not?” he said at the group’s 42nd AGM in Shah Alam yesterday. In August last year, Pengurusan Air Selangor Sdn Bhd (Air Selangor) took over Syarikat Pengeluar Air Sungai Selangor Sdn Bhd.

On April 24, KPS’ 30%-owned Splash Holdings received RM1.9 billion from Air Selangor for the first tranche payment of the takeover, of which KPS is entitled to a sum of RM570 million.

Following the divestment, KPS declared a special one-off dividend of 32.6 sen per share, totalling RM175.19 million and to be paid on May 28, 2019.

The special dividend is an addition to the group’s final dividend of 4.25 sen per share.

On KPS’ recent proposed acquisition of Toyoplas Manufacturing (M) Sdn Bhd, Raja Shahreen said the latter will enhance its plastic injection moulding production, which is currently undertaken by KPS’ wholly owned subsidiary CPI (Penang) Sdn Bhd.

“The Toyoplas acquisition is an expansion of our business in CPI and it will continue to evolve in that particular area as it is a high-performing (subsector of the manufacturing industry).

“At this stage, we have not discussed the acquisition with the shareholders. We are still going through the details to ensure the meeting will be done smoothly,” he said, referring to the EGM for the Toyoplas acquisition which will be held in July.

Earlier this month, the stateowned group proposed an acquisition for Toyoplas, a company involved in the plastic injection moulding with operations located in Malaysia, China and Indonesia, for RM311.25 million.

The acquisition is expected to strengthen KPS’ portfolio in the plastic manufacturing segment after it acquired CPI from HK Resources Sdn Bhd and TCS Resources Sdn Bhd for RM250 million last year.

For CPI’s acquisition of a 4.5-acre (1.82ha) piece of land at Bayan Lepas Industrial Park, Raja Shahreen said an electronic manufacturing services (EMS) factory set to be built in the area is expected to boost KPS’ manufacturing segment from 2020 onwards.

“The development of the EMS factory in Bayan Lepas will contribute a significant amount of revenue to the group’s operations through CPI,” he said.

Last July, CPI bought a piece of land at the industrial park from Penang Development Corp for RM27.7 million.

The construction of the new EMS facility will commence in the first half of 2019 and is expected to complete in 2020.

For its financial year of 2018, KPS posted a revenue of RM582.3 million, a 61.1% increase year-on-year against RM361.5 million in 2017.

Its manufacturing division contributed RM357.5 million or 61.4%, which is largely due to Century Bond Sdn Bhd’s higher revenue.

At yesterday’s closing, KPS’ share price fell 0.04 sen or 3.7% to RM1.04 with a market capitalisation of RM558.88 million.