Kulim

Kulim

Postby winston » Sat Oct 25, 2014 11:15 am

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AmResearch maintains ‘buy’ call on Kulim
25 OCTOBER 2014

AMRESEARCH Sdn Bhd expects Kulim (Malaysia) Bhd’s earnings to drop by almost 40 per cent over the long-term, due to the loss of contribution from New Britain Palm Oil Ltd (NBPOL).

The firm has maintained its “buy” call on Kulim — which is selling its 49 per cent stake in NBPOL to Sime Darby Bhd — for the payment of the special dividends.

Kulim on Thursday announced that it would be distributing RM1 billion out of the disposal proceeds of RM2.75 billion as dividends.

However, the dividends of 78 sen per share would be staggered over two years.

There were no details on how the dividends would be staggered, AmResearch said in a report yesterday.

“As Kulim would only be receiving its proceeds from the disposal of NBPOL at the end of the year, we reckon that the additional or special dividends would only be paid next year.

“Kulim is expected to record a gain of RM1.56 billion from the disposal of NBPOL,” the firm said, adding that Kulim’s cost of investment in NBPOL was RM216.4 million.

Separately, AmResearch noted that the independent directors of NBPOL had recommended its shareholders to accept Sime Darby’s cash offer in the absence of a superior proposal.

“In their view, Sime’s offer is fair and reasonable,” it added.

Source: NST
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Re: Kulim

Postby winston » Sat Oct 25, 2014 11:32 am

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Windfall of RM1b for Kulim shareholders
23 OCTOBER 2014

KUALA LUMPUR: Kulim (Malaysia) Bhd will return to its shareholders RM1 billion, or 78 sen per share, from the sale of its 48.97 per cent stake in New Britain Palm Oil Ltd (NBPOL) to Sime Darby Bhd for £525.4 million (RM2.75 billion).

The RM1 billion will be paid back over two years after the disposal, it added.

The disposal represents a massive net gain of RM1.56 billion for Kulim, the company said in a statement yesterday.

Kulim bought 96 million NBPOL shares in 1996 for only RM282.71 million.

It will use RM600 million from the sale proceeds to repay bank borrowings within the next six months, which will reduce its gearing to 0.21 times from 0.4 times. Another RM300 million will be used for general working capital in the next 12 months.

It will also set aside RM850 million for investments or acquisitions of viable assets and businesses in the next two years.

Specifically, Kulim intends to part-finance its oil palm plantation and venture in the oil and gas sector in Indonesia.

According to the statement, Kulim received a formal offer document from Sime Darby yesterday to buy its NBPOL stake at £7.15 per share.

The offer is an 85 per cent premium to NBPOL’s last closing price of £3.87 on the London Stock Exchange on October 8.

Kulim’s board of director had on October 9 expressed interest in accepting Sime Darby’s offer if there were no other superior bids.

The company will now put the proposed disposal to its shareholders at an extraordinary general meeting at a later date.

Source: NST
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Re: Kulim

Postby winston » Sun Oct 26, 2014 7:42 pm

Kulim’s transformation By: YVONNE TAN

WITH its declaration that it is earmarking RM1bil for dividend payments and a further RM850mil for acquiring new businesses, clearly a transformation is taking place at plantation company Kulim (M) Bhd.

Based on the RM1bil or 78 sen per share in dividend payments and Kulim’s current share price of RM3.49 the company’s dividend yield could technically hit a high of 23%.

However, it should be noted that firstly, this is a one-off dividend payment, which means it is not likely to be a sustainable yield for Kulim. Secondly, Kulim has said that it will stagger that payment over 2 years,which should halve the yield figure.

Kulim did not declare any dividends for its financial year ended Dec 31, 2013 (FY13) but had paid out a special dividend of 90.94 sen per share arising from the proceeds received from divesting its foods and restaurants business on Jan 25, 2013.

On Thursday, Kulim said the proposed disposal of its 48.97% stake in New Britain Palm Oil Ltd (NBPOL) to Sime Darby Bhd was expected to raise gross proceeds of £525.40mil (RM2.75bil) from which it will use to pay dividends and acquire new businesses, among others.

Kulim said it was selling its stake at £7.15 (RM37.47) a share to Sime as there was “no superior offer from other parties for its stake”.

Market observers opine that this proposed stake sale is an extremely good deal for Kulim as Sime is paying top dollar for the former’s stake in NBPOL considering the cautious market outlook on commodities such as crude palm oil.

Sime’s offer price came in at a whopping 85% premium to its market price prior to the deal’s announcement.

Another interesting fact stemming from Kulim’s stake sale apart from the dividend payments is that it will earmark RM850mil from the proceeds for the acquisition of new businesses.

Kulim says this money will be used to grow its existing business as well as to venture into new ones that are viable and show good growth prospects.

This seems to leave the door open for Kulim to venture into just about any other business.

In particular though, Kulim says that proceeds will be used to “part-finance the expansion of its oil palm plantation and to also part-finance its venture into the oil and gas sector in Indonesia”.

Kulim has other businesses such as its “intrapreneur ventures” segment and oil and gas but its plantation sector was still the main driver in 2013, contributing 90% of the group’s revenue, according to its latest annual report.

Kulim first purchased a stake in NBPOL in 1996, when it was a small concern with some 18,000ha of oil palm. NBPOL now has close to 80,000ha of oil palm planted in Papua New Guinea (PNG), making the London-listed outfit the largest plantation group in PNG and also the largest company in that country.

An analyst who tracks Kulim describes NBPOL’s proposed sale as a “huge value-unlocking potential opportunity” for Kulim.

“It will allow it to focus on its Indonesian ventures.”

In its annual report, Kulim says its Indonesian plans include target planting of 500 ha for this year.

The first 500 ha clearing for a new planting programme together with the setup of 80 ha of oil palm nursery was expected to commence in the third quarter of 2014, it says in the report, adding that thereafter, it is looking to accelerate the new planting programme to between 5,000 to 7,000 ha per annum in subsequent years.

As for its oil and gas business, Kulim says under the terms of the MOU signed with PT GSB last year, Kulim together with PT GSB “will explore strategies to take advantage of the Indonesian government’s decision to liberate the O&G sector.”

Kulim reported a net profit of RM98.4mil for the second quarter ended June 30, up 49% from the RM66mil last year with revenue coming in at RM817.5mil, up 3% from RM792mil earlier.

Meanwhile, another aspect of this saga is Johor Corp (JCorp), the parent company of Kulim.

It has long been said that JCorp, saddled with its huge debts, needs to offload some of its assets.

NBPOL was one such asset.

JCorp has debts to the tune of more than RM3bil as at its financial year ended Dec 31, 2013.

But with Kulim planning to declare RM1bil in dividends, JCorp, with a 55% stake in Kulim, would be entitled to around RM550mil from that, which should help it reduce some of its debts.

For Sime, this is its first big plantation acquisition following the mega-merger of plantation companies under the Permodalan Nasional Bhd group.

Source: The Star
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Re: Kulim

Postby winston » Mon Oct 27, 2014 4:42 pm

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Johor Corp, KWAP up stakes in Kulim By: NADYA NGUI

KUALA LUMPUR: Johor Corporation (JCorp) and Kumpulan Wang Persaraan (KWAP), have been raising their shareholdings in Kulim (Malaysia) Bhd due to the positive prospects seen from the sale of its stake in New Britain Palm Oil Ltd (NBOL) to Sime Darby Bhd.

In a filing to Bursa Malaysia on Monday, JCorp had bought 145,000 shares in Kulim on Oct 20, increasing its stake to 774.34 million shares or 59.8%.

As for KWAP, the fund bought 147,700 shares on Oct 21, increasing its stake to 107.566 million units or 8.3%.

Kulim is expected to record a gain of RM1.56bil from the sale of its 48.97% stake in New Britain Palm Oil Ltd (NBOL) to Sime Darby Bhd.

It is selling its stake at £7.15 (RM37.47) a share to Sime Darby as there was no superior offer from other parties for its stake.

StarBiz reported this proposed stake sale is an extremely good deal for Kulim as Sime is paying top dollar for the former’s stake in NBPOL considering the cautious market outlook on commodities such as crude palm oil.

At 4pm, Kulim's shares rose one sen to RM3.50 with 766,200 shares done between RM3.45 and RM3.51.

Source: the Star
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Re: Kulim

Postby winston » Tue Oct 28, 2014 8:05 am

Kulim partners Indonesia company in O&G venture By: CHERYL POO

PETALING JAYA: Kulim (M) Bhd has inked a joint operating agreement (JOA) with its long-time Indonesian plantation partner PT Graha Sumber Berkah (GSB) to become a partner of the South West Bukit Barisan Block (SWBB) production sharing contract (PSC) in central Sumatra.

The JOA involved Kulim’s wholly-owned subsidiary Kulim Energy Nusantara Sdn Bhd (KENSB), GSB and PT Radiant Bukit Barisan E&P (RBB) for the exploration and development of an oil and gas (O&G) field in the SWBB block. RBB will remain the main operator of the field.

The estimated cost for exploration activities of the O&G field from 2015 to 2018 is RM175.7mil. According to a filing with Bursa Malaysia, Kulim would initially finance its portion with internally generated funds. In return, KENSB would be entitled to 60% of net profit from the project.

The JOA was expected to contribute positively to the group’s earnings and enable it to grow on a well-diversified basis, Kulim managing director Ahamad Mohamad said in a statement.

“The JOA in Indonesia is in step with Kulim’s long-term business strategy to expand into upstream O&G activities such as exploration, development and production, enabling us to tap into strategic investment opportunities to broaden our earnings base and generate sustainable growth,” Kulim chairman Datuk Kamaruzzaman Abu Kassim said.

Kulim is in other businesses such as its “intrapreneur ventures” segment and oil and gas but its plantation sector was still the main driver in 2013, contributing 90% of the group’s revenue, according to its latest annual report.

Kamaruzzaman also said Kulim’s expansion into O&G was timely given the recent proposed divestment of its 48.97% subsidiary New Britain Palm Oil Ltd for about RM2.75bil, which it announced last Thursday would go into raising gross proceeds to pay dividends and acquire new businesses.

“We are already involved in other O&G businesses such as transportation of clean petroleum products and fabrication of O&G pipelines. We want to move up the O&G value chain by leveraging on the experience from our indirect subsidiary E.A. Technique (M) Bhd and subsidiary Danamin (M) Sdn Bhd, which are active players in Malaysia’s O&G.”

RBB is a Jakarta-based company principally involved in exploration and development of O&G fields in the SWBB Block.

Its original exploration area was 3,895 sq km, where it has now been reduced to 779 sq km to comply with terms under the SWBB PSC.

RBB and PC SKR International Ltd had been awarded the SWBB PSC by the Indonesian government for a 30-year concession from 2008.

The exploration activities cover an initial exploration period of six years before commencement of the O&G development and production. There is the option to extend this exploration period to a maximum of four years.

RBB had recently submitted an application on this matter pending approval from the Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi.

Under the PSC, RBB and SKR have participating interests of 51% and 49%, respectively in the SWBB Block. RBB is the operator.

Source: The Star
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Re: Kulim

Postby winston » Sun Nov 02, 2014 6:13 am

Is it opportune time for Kulim to venture into O&G? by: YVONNE TAN

EVEN before receiving the RM2.75bil windfall from the proposed sale of its equity in New Britain Palm Oil Ltd (NBPOL), Kulim (M) Bhd has announced plans on how to spend some of that money.

The group that is focused primarily on plantations at the moment, plans to move into oil and gas (O&G) exploration and this is raising some questions among industry observers.

What expertise does Kulim have to participate in the highly risky and capital-intensive activity of exploring for O&G?

Another question surrounding the deal is that is this the best time to embark on an O&G project considering the inconsistencies of the price of crude oil and Indonesia is going through a change in leadership?

When asked, Kulim declined to comment saying that its management will hold a press conference by the end of the year, seemingly to reveal more details on its planned venture.

A senior analyst who covers Kulim says it is too early to tell whether its plan to move into O&G exploration will succeed or fail.

“However, the amount that they are committed to for now is not a very huge sum.

“The heavier capex will come during field development and production where billions need to be poured in,” he says.

So far, investors appear to not have warmed up toward this plan, judging by the share price movement of Kulim.

The Kulim stock is down 2.3% this week to RM3.42 despite a stronger broader market.

“Kulim is only going to pay out about 30% of the proceeds from the sale of NBPOL as dividends so probably that is a little upsetting too,” says the analyst.

Kulim first announced last Thursday that its proposed disposal of its 48.97% stake in NBPOL to Sime Darby Bhd was expected to raise gross proceeds of £525.40mil (RM2.75bil) from which it will use to pay dividends and acquire new businesses, among others.

More specifically, apart from RM1bil earmarked for dividends which works out to 78 sen per share, Kulim has also allocated RM600mil for repayment of bank borrowings, RM850mil for investment or acquisitions of viable assets and business and RM300mil for general working capital.

Kulim is said to have gotten an extremely good deal as the NBPOL stake is being sold for £1.07bil (RM5.6bil) – a whopping 85% premium to its market price prior to the deal’s announcement.

Following the announcement on its proposed stake sale, Kulim on Monday provided elaboration on its new business plans, saying that it and its Indonesian plantation partner, PT Graha Sumber Berkah (GSB), had inked a joint operating agreement (JOA) to become co-operators of the South West Bukit Barisan (SWBB) block production sharing contract (PSC) in central Sumatra.

According to it, the agreement which involves Kulim’s wholly-owned subsidiary, Kulim Energy Nusantara Sdn Bhd (KENSB), GSB and PT Radiant Bukit Barisan E&P (RBB) as operator of the PSC, allows Kulim to “leverage on its Indonesian partner to tap fresh investment opportunities in Indonesia”.

Notably, RBB is the main operator and under the JOA, the co-operators which are the other two parties are obliged to provide support to the former in order for it to perform its obligations under the SWBB PSC.

New dimension

According to Kulim, the estimated total cost for exploration activities in the SWBB block throughout 2015-2018 is about RM175.7mil, which Kulim would initially finance with internally generated funds.

KENSB will be entitled to 60% of net profit from the project.

In its Monday announcement, Kulim said that it was “entering a new dimension with new O&G opportunities in the region up for grabs as new spaces are being created.”

“We are already involved in other O&G businesses such as transportation of clean petroleum products and fabrication of O&G pipelines,” it said, referring to its subsidiaries, E.A. Technique (M) Bhd and Danamin Sdn Bhd.

E.A. Technique, which is seeking a listing on Bursa Malaysia’s Main market has a core business of “providing oil tankers to carry clean products and dirty oil on behalf of oil majors and independent trading houses”, according to its website while Danamin is involved in non-destructive testing and inspection services for the O&G industry.

“While they do have a foothold in the O&G industry, providing tankers and services are not akin to the risky and often complicated business of oil exploration,” remarks an observer.

“It remains to be seen, whether they will succeed.”

Earlier in its statement on Monday, Kulim managing director Ahamad Mohamad (pic) said central Sumatra was considered as one of the “most prolific” oil production basins in Indonesia and that production testing was “currently progressing with very encouraging indications.”

Kulim reported a net profit of RM98.4mil for the second quarter ended June 30, up 49% from the RM66mil last year with revenue coming in at RM817.5mil, up 3% from RM792mil earlier.

After selling off the NBPOL stake, the group’s gearing will be reduced to about 0.21 times from about 0.40 times.

Recall, Kulim has also said that money gained from the stake sale will be used to grow its existing business besides venturing into new ones that are viable and show good growth prospects.

This could mean other businesses apart from O&G exploration.

Kulim has other businesses currently such as its “intrapreneur ventures” segment but its plantation sector was still the main driver in 2013, contributing 90% of the group’s revenue, according to its latest annual report.

Source: The Star
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Re: Kulim

Postby winston » Thu Dec 11, 2014 8:06 am

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DJ Kulim to Buy 60% Stake in Indonesian Oil, Gas Company For $133.6 Million

KUALA LUMPUR--Kulim (Malaysia) Bhd. (2003.KU) said Wednesday it is buying a 60% stake in an Indonesian oil and gas company for $133.6 million as part of a move to diversify away from its palm oil plantation business.

Kulim is buying the stake in PT Citra Sarana Energi from current shareholders PT Wisesa Inspirasi Sumatera and PT Inti Energi Sejahtera, the company said in a statement. Once the acquisition is completed in the first half of 2015, they will own 32% and 8%, respectively, in Citra Sarana Energi.

The proposed acquisition would allow the company to "expand its involvement in the oil and gas sector, particularly into the niche upstream activities in Indonesia including exploration, development and production," Kulim said.

The deal would be funded mainly with proceeds from the sale of its holdings in New Britain Palm Oil Ltd. (NBPO.LN), Kulim said. Earlier this month, Kulim agreed to sell its 49% stake in the Papua New Guinea-based alternative-fuel producer to Sime Darby Bhd. (4197.KU) for 525.4 million pounds ($821.7 million).

Source: Dow Jones Newswire
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Re: Kulim

Postby winston » Fri Dec 12, 2014 8:17 am

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10 Dec 2014

Kuim to Buy 60% Stake in Indonesian Oil, Gas Company For $133.6 Million

KUALA LUMPUR--Kulim (Malaysia) Bhd. (2003.KU) said Wednesday it is buying a 60% stake in an Indonesian oil and gas company for $133.6 million as part of a move to diversify away from its palm oil plantation business.

Kulim is buying the stake in PT Citra Sarana Energi from current shareholders PT Wisesa Inspirasi Sumatera and PT Inti Energi Sejahtera, the company said in a statement. Once the acquisition is completed in the first half of 2015, they will own 32% and 8%, respectively, in Citra Sarana Energi.

The proposed acquisition would allow the company to "expand its involvement in the oil and gas sector, particularly into the niche upstream activities in Indonesia including exploration, development and production," Kulim said.

The deal would be funded mainly with proceeds from the sale of its holdings in New Britain Palm Oil Ltd. (NBPO.LN), Kulim said.

Earlier this month, Kulim agreed to sell its 49% stake in the Papua New Guinea-based alternative-fuel producer to Sime Darby Bhd. (4197.KU) for 525.4 million pounds ($821.7 million).

Source: Dow Jones Newswire
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