Latest news with #RM151mil
The Star
04-08-2025
- Business
- The Star
Pansar poised to capitalise on Sarawak's infrastructure drive
KUCHING: Pansar Bhd is eyeing more large-scale public infrastructure projects to be funded under the Sarawak government's 2025 state budget. Executive chairman Datuk James Tai Cheong said out of the RM10.9bil allocated for development expenditure in Sarawak's 2025 budget, 62% or RM6.76bil is earmarked for rural infrastructure projects, reflecting the state government's strong commitmentto enhancing land connectivity and upgrading infrastructure for rural communities. 'This ongoing focus continues to generate significant business opportunities (for Pansar),' he said in the company's 2025 annual report. In the 12 months ended March 31, 2025 (FY25), Tai said Pansar, via its wholly-owned subsidiary Perbena Emas Sdn Bhd, secured several new infrastructure contracts worth a combined RM2.1bil. These include infrastructure works for the Kuching Urban Transportation System's (KUTS) Autonomous Rapid Transit Blue-Line Package 2 (contract value of RM805mil), the Sarawak-Sabah Link Road (RM777mil), as well as the design and build of the Serian-Gedong-Samarahan dual carriage highway (RM478mil), slated for implementation between FY25 and FY28. Pansar acquired Perbena Emas for RM151mil in 2021 to diversify its business into the construction industry. In FY25, the construction and infrastructure segment remained Pansar's largest revenue earner, contributing RM505.8mil (45.8% of the group's total revenue of RM1.1bil),up 13.2% from FY24. According to Pansar's management, the segment's order book remained robust at RM2.2bil. 'Looking ahead, we are optimistic about the continued growth of the construction and infrastructure industry, especially public sector projects in Sarawak. 'Leveraging the positive outlook, we will continue to actively replenish our order book and strengthen our execution capabilities to capitalise on upcoming project opportunities,' the company said. To undertake the KUTS Blue-Line project, Perbena Emas has set up a 51-49 joint venture, PESB CRM JV Sdn Bhd, with China Road & Bridge Corp. Moving forward, Tai said the group expects to navigate more challenging conditions shaped by heightened market competition, rising global uncertainties, and the yet-unknown impact of the government's increase to the sales and service tax. He said these factors are expected to exert downward pressure on consumer sentiment as the market adopts a wait-and-see attitude, which might affect its profits. The company plan to drive sales growth through targeted market efforts and customer engagement, as well as adopt tighter inventory management and strengthen its service infrastructure. 'Through these measures, the company is positioned to adapt to external pressure while building a more agile, resilient and customer-centric business,' added Tai.
The Star
30-07-2025
- Business
- The Star
UMB deal makes sense
Kenanga Research said the group could fully fund the latest acquisition internally. PETALING JAYA: United Malacca Bhd 's (UMB) decision to acquire the remaining 17% it does not own in Indonesia-based PT LifereAgro Kapuas (PT LAK) from PT Bank OCBC NISP TBK for US$10mil is a good deal for the planter, according to Kenanga Research. The research house said, in a report, that it made commercial sense to gain full control of a profitable and growing subsidiary. 'The acquisition is also valued fairly, hence neutral to prospective ratings and long-term positive financially as PT LAK has room to expand,' Kenanga Research added. UMB had acquired 83% of PT LAK's equity back in January 2016 for US$66.4mil. PT LAK came with Izin Usaha Perkebunan or a plantation licence for 24,585ha of agriculture land in central Kalimantan. PT Lak is divided into four estates with a palm oil mill. The land is slightly larger at 24,607ha split between Plasma smallholder scheme (10,434ha) and UMB's 'Inti' core holding of 14,173ha. Out of this, 11,419ha can be planted with oil palm. Kenanga Research said strategically, UMB would have full control over PT LAK. At about 10 times PT LAK's earnings in financial year 2025 (FY25), the valuation also looks fair to attractive. Importantly, PT LAK has capacity to grow as 3,312ha or 29% of its total plantable area of 11,419ha are still awaiting oil palm development. Out of the 8,099ha already planted, the trees are still young (10 years of age), and hence, fresh fruit bunch (FFB) yields are still low at 15 tonnes per ha, whereas the group's more matured estates typically yield 19 tonnes to 20 tonnes per ha. Meanwhile, Kenanga Research said the group could fully fund the latest acquisition internally. UMB ended its financial year 2025 with a net cash of RM151mil. 'Even after paying out RM27mil in dividends – seven sen final and six sen special dividends – the group can easily fund this acquisition of RM42mil by cash,' the research house pointed out. Furthermore, the returns from PT LAK should also exceed the rates UMB is earning from its cash deposits, it added. Meanwhile, RHB Research said firm crude palm oil (CPO) prices are also to be expected. CPO prices had eased since the recent peak in November 2024 but a global supply deficit looks set in 2025 with supply tightness likely to persist into 2026. Hence, CPO prices are expected to stay firm with an average CPO price of RM4,000 per tonne expected for UMB over FY26-FY27, the research house explained. Kenanga Research, which has maintained an 'outperform' call on the stock with a target price of RM6, said 'we see deep value at current levels'. The risks to Kenanga Research's call include adverse weather, softer CPO prices and the rising cost of labour, fertiliser and fuel.
