Latest news with #RM143m
Daily Express
2 days ago
- Business
- Daily Express
Sabah GLCs mostly ‘blackholes'
Published on: Saturday, June 07, 2025 Published on: Sat, Jun 07, 2025 By: David Thien Text Size: From left – Adi, Roger Chin, Lo and Haffisz. Kota Kinabalu: A majority of the 250-odd Sabah GLCs (Government-linked companies) are like 'blackholes' sucking away financial resources from Sabah. But there are a few bright stars. 'These statutory bodies and GLCs produced only RM143m dividends to the Sabah Government, of which RM50m was from SMJ Energy. Only a small number can generate dividends for the government. The performance of the rest is pathetic,' said Datuk John Lo, a former banker and now in the Sabah Economic Action Council (SEAC). Advertisement The other profitable GLCs include Sabah Foundation's subsidiary Innoprise, Sabah Energy Corporation, Sogip, Sogdc, POIC Lahad Datu, Suria Capital, Sabah Credit Corporation and Sawit Kinabalu. Lo was a guest panel speaker at the NGO Sabar – Kopi Tiam Council podcast on 'Oversight & Reform of government-Linked Companies (GLCs) Transparency, accountability & Corruption Prevention session, recently. 'Most are either non-performing or underperforming,' Lo said and pointed out that GLCs hold many monopolistic rights for example, cement [Sabah Cement Industries], ports [Suria, POIC Sandakan and POIC Lahad Datu], water [Jetama] and fishing landing rights [Safma]. They have been granted very cheap but extremely prime land, most of them at RM1,000 premium. [Innoprise, SUDC, subsidiary of Sedco, Suria, SICC, Sabah Energy, TAED.]. Advertisement Others have been vast acreage of valuable agricultural land for free or at nominal premium. [Sawit Kinabalu, KPD, Sabah Softwood.] Then there are those who have been granted cheap and valuable land for industrial park [KKIP, Sogip, POIC Sandakan and POIC Lahad Datu, Asian Supply Base in Labuan] or granted concession rights in oil and gas, river and sea sand [Sabah Energy, Sabah Gas, SMJ Energy, Sedco]. GLCs are also into hotels, resorts and jungle resorts [Innoprise, Sedco and Sabah Air] or granted exclusive JV preference with Sabahan and non-Sabahan companies. 'Most significantly, many GLCs have become a huge liability and drag on Sabah's economic growth. Allowing GLCs to continue without proper governance will result in serious economic consequences. Sabah can never catch up,' he said. In most cases the political appointments of chairmen, board of directors and senior management have been inappropriate. 'GLCs are still bleeding losses year in year out. Sabahans are subsiding these losses that have easily run into billions the last 35 years. The accumulated losses are staggering,' he said. What is worse is that some of these GLCs have sold or entered into JVs in many valuable assets like prime commercial and agriculture land, buildings, monopolies and concessions, most of which are lopsided against Sabah. These GLCs have taken huge loans from the government and banks [especially SDB] that they cannot service or repay, often forcing Sabah taxpayers to bail them out. 'They enter into many lopsided JV agreements against the interests of Sabah. They have the greatest number of failed JV projects that need rescue by 'white knights'. 'These billions of dividends can be tax free and can transform Sabah's economic ownership back to Sabahans. The greatest impact is job creation. If each GLC, on average, can create an additional 100 jobs, there will be additional 25,000 jobs!' said Lo. 'This money could have been used for the hard-core poor, repair or investment in infrastructures, health, scholarships or to build two or three universities. 'The GLCs have many JV projects that are suspended or non-start for years.' 'SDB's revamp is showing encouraging results. Keep an eye on Sabah Energy as it will be the new performing star.' Lo was pleased that Chief Minister Datuk Seri Hajiji Noor has appointed suitable Sabahans to head some boards and management e.g. SDB, SMJ Energy, Sabah Energy, Sogip, Sogdc and the latest, a new Group GM for Sedco. Hajiji has appointed advisors on the economy, oil and gas, energy, tourism and international affairs. Notably, he said state Finance Minister Datuk Seri Masidi Manjun has appointed a task force on GLCs. Masidi has also appointed an oversight committee for GLCs. 'Hopefully, the revamp of GLCs will lead some of them to be listed on Bursa. Bursa will impose demanding and stringent governance requirements on these GLCs. 'GLCs that have independent board of directors and professional management appointed by Hajiji and Masidi are turning around with noticeable improvements. 'It is imperative that future Sabah governments continue to revamp, rationalise the GLCs. 'Focusing on and sorting out the mess in Sabah's GLCs is a critical economic issue for every Sabahan, especially for the present young generation and their children. These GLCs are eroding away their future. 'I hope all Sabahans, every man, every woman, every voter, after listening to Sabar's podcast, will support the reformation, transformation and rationalization of Sabah's GLCs. 'It is in every Sabahan's interest to see to it that all GLCs succeed,' Lo stressed. * Follow us on our official WhatsApp channel and Telegram for breaking news alerts and key updates! * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
Yahoo
26-05-2025
- Business
- Yahoo
UEM Edgenta Berhad (KLSE:EDGENTA) Is Finding It Tricky To Allocate Its Capital
What financial metrics can indicate to us that a company is maturing or even in decline? More often than not, we'll see a declining return on capital employed (ROCE) and a declining amount of capital employed. Basically the company is earning less on its investments and it is also reducing its total assets. In light of that, from a first glance at UEM Edgenta Berhad (KLSE:EDGENTA), we've spotted some signs that it could be struggling, so let's investigate. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Just to clarify if you're unsure, ROCE is a metric for evaluating how much pre-tax income (in percentage terms) a company earns on the capital invested in its business. Analysts use this formula to calculate it for UEM Edgenta Berhad: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) 0.072 = RM143m ÷ (RM3.0b - RM1.0b) (Based on the trailing twelve months to December 2024). Therefore, UEM Edgenta Berhad has an ROCE of 7.2%. In absolute terms, that's a low return but it's around the Construction industry average of 8.2%. See our latest analysis for UEM Edgenta Berhad In the above chart we have measured UEM Edgenta Berhad's prior ROCE against its prior performance, but the future is arguably more important. If you're interested, you can view the analysts predictions in our free analyst report for UEM Edgenta Berhad . We are a bit worried about the trend of returns on capital at UEM Edgenta Berhad. To be more specific, the ROCE was 11% five years ago, but since then it has dropped noticeably. On top of that, it's worth noting that the amount of capital employed within the business has remained relatively steady. Companies that exhibit these attributes tend to not be shrinking, but they can be mature and facing pressure on their margins from competition. So because these trends aren't typically conducive to creating a multi-bagger, we wouldn't hold our breath on UEM Edgenta Berhad becoming one if things continue as they have. In summary, it's unfortunate that UEM Edgenta Berhad is generating lower returns from the same amount of capital. Long term shareholders who've owned the stock over the last five years have experienced a 51% depreciation in their investment, so it appears the market might not like these trends either. With underlying trends that aren't great in these areas, we'd consider looking elsewhere. If you want to continue researching UEM Edgenta Berhad, you might be interested to know about the 1 warning sign that our analysis has discovered. If you want to search for solid companies with great earnings, check out this free list of companies with good balance sheets and impressive returns on equity. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
17-02-2025
- Business
- Yahoo
Here's Why Seng Fong Holdings Berhad (KLSE:SENFONG) Has Caught The Eye Of Investors
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Seng Fong Holdings Berhad (KLSE:SENFONG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Seng Fong Holdings Berhad with the means to add long-term value to shareholders. Check out our latest analysis for Seng Fong Holdings Berhad If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Over the last three years, Seng Fong Holdings Berhad has grown EPS by 8.2% per year. That growth rate is fairly good, assuming the company can keep it up. Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The music to the ears of Seng Fong Holdings Berhad shareholders is that EBIT margins have grown from 4.7% to 7.4% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth. You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image. You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Seng Fong Holdings Berhad's future profits. It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Seng Fong Holdings Berhad followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. Indeed, they hold RM143m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 21% of the company, demonstrating a degree of high-level alignment with shareholders. One important encouraging feature of Seng Fong Holdings Berhad is that it is growing profits. To add an extra spark to the fire, significant insider ownership in the company is another highlight. These two factors are a huge highlight for the company which should be a strong contender your watchlists. You should always think about risks though. Case in point, we've spotted 2 warning signs for Seng Fong Holdings Berhad you should be aware of, and 1 of them is potentially serious. While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in MY with promising growth potential and insider confidence. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
