CCM’s dividend payout could be hit by Covid-19

By FARA AISYAH / Pic By ARIF KARTONO

CHEMICAL Co of Malaysia Bhd (CCM) expects its dividend payouts for the year to be impacted by the Covid-19 pandemic.

The group has historically paid out dividends despite tough times, CCM group MD Nik Fazila Nik Mohamed Shihabuddin (picture) said.

“We have never not paid our dividend even during the time when we lost money. Our policy has always been to pay a dividend of 50% to 70% of our profit after tax and minority interest,” she told reporters in a virtual media briefing yesterday.

Nevertheless, the group will evaluate its cashflow before embarking on a payout to ensure that it fulfils its financial obligations first before paying out a dividend, she added.

For the financial year ended Dec 31, 2019 (FY19), CCM declared a total dividend of five sen. It paid nine sen in FY18, 2.5 sen in FY17, five sen in FY16, 2.5 sen in FY15, 2.5 sen in FY14, 2.15 sen in FY13, 5.75 sen in FY12, 2.75 sen in FY11 and 2.65 sen in FY10.

The chemicals group did not declare any dividend for the first quarter ended March 31, 2020 (1Q20).

We are cautiously optimistic amid the uncertainties of a post- Covid-19 economic environment on the domestic and global fronts, Nik Fazila added.

As such, the group will execute a three-pronged strategy encompassing the prioritisation of capital expenditure, heightened monitoring of its working capital requirements, and ensuring availability of cash and liquidity at all times to manage the impact of the deadly pandemic.

“Our efforts to enhance our production capacities have enabled dividend payments and can be seen with the availability of an additional 50% capacity of our chloralkali production with the reactivation of our Pasir Gudang Plant 1 (PGW1) in late February 2020, while the calcium nitrate plant will progressively be increasing its production capacity from 1,000 metric tonnes (MT) per month to 1,900MT per month,” Nik Fazila said.

Besides optimising existing resources, the firm is expanding its capacity for Kleeners, a cleaning solution for ceramic formers supplied to glove manufacturers.

Its Kleeners facility at a new site in Bangi will double output from 9,000MT to 18,000 MT per annum upon completion and full commission in 1Q21.

The group will continue to improve operational, financial and cost efficiencies, and prioritise research and development, Nik Fazila said.

CCM will also resume the supply of caustic soda to Petroliam Nasional Bhd (Petronas) when the latter resumes operations at its Refinery and Petrochemical Integrated Development (Rapid) site at the end of 2020, following disruptions due to a fire incident that took place at Rapid in April 2019.

In April last year, the group was awarded a three-year contract with a one-year extension option worth RM351.9 million by Petronas to supply caustic soda to Petronas Refinery and Petrochemicals Corp Sdn Bhd.

CCM also announced the appointment of Mohammad Farish Mohd Noor as its CFO in a Bursa Malaysia filing yesterday.

Mohammad Farish, 46, holds a Bachelor of Commerce from the University of Melbourne, Australia, and is a member of the Chartered Accountants Australia and New Zealand.

He was previously head of finance (asset consultancy) at UEM Edgenta Bhd and head of commercial at OPUS International (M) Bhd from November 2018 until May 2020. He also had stints at MMC Corp Bhd, the MMC Group of Cos, Rio Tinto Group (Australia), Petronas and Ernst & Young.