Billion Ringgit Club: Taking PPB’s gems beyond Wilmar’s shadow

Written by Cindy Yeap of theedgemalaysia.com
Tuesday, 25 September 2012

When “Sugar King” Tan Sri Robert Kuok decided in 2007 to spin off PPB GROUP BHD []’s oil palm PLANTATION []s and edible oils business to hold a sizeable stake in Wilmar International Ltd, led by his nephew Kuok Khoon Hong, he probably did not expect the Singapore-listed Wilmar to dictate PPB’s earnings and share price as it does today.

After all, Wilmar only began to make up more than two-thirds of PPB’s earnings two years later following the surprise sale of PPB’s sugar business the Malaysian government in January 2010.

Whatever the circumstances, analysts are finding it tough to make a case to call PPB a “buy” on its own merit today due to the volatility seen in the share price and profit of its 18.32% owned associate Wilmar.


“With over 70% of its earnings coming from Wilmar, you’re basically taking a view on Wilmar rather than PPB,” said one senior analyst.

While some of PPB’s own portfolio of businesses such as the Massimo bread business, are showing decent growth, the analyst points out earnings from PPB’s PROPERTIES [] and wastewater management businesses can also be volatile, while the flour milling and livestock farming business face thin margins and tepid utilisation rates. Even PPB’s film exhibition and distribution business under Golden Screen Cinemas (GSC) continues to face competition from smaller players and piracy.

“The only positive is that the group has been in the commodities and consumer businesses for a long time and if anyone can ride through the volatility, it would be them,” the analyst added. “Anyone who buys them has to take a long-term view.”

PPB’s new managing director Lim Soon Huat, 47, admits there is little PPB can immediately do to outrun Wilmar’s shadow.

Lim has been managing director for only two months, but he has been with the Kuok Group in Singapore, Thailand, Hong Kong and China for over 15 years and had been on PPB’s board as non-executive director since May 2008. Lim helped oversee the Kuok Group’s investments and operations in Indonesia, which include flour milling, sugar cane plantations, sugar milling and hotels,” PPB’s latest annual report read.

It remains to be seen if Lim’s appointment signals increasing investments by PPB in the archipelago where Wilmar has easily 20% of the branded cooking oil business.

“I’ll definitely be spending more time [in Kuala Lumpur] now,” Lim told The Edge Financial Daily on
sidelines of a recent briefing.

Both Wilmar and PPB’s stock prices skidded to their lowest in over three years after Wilmar announced its second back-to-back quarterly loss for its oilseeds trading business in the second quarter ended June 30 — the second such occurrence the past eight quarters since the second half of 2010.

As a result, profit contributions from Wilmar plunged 52% to RM209 million in the first half of 2012,
causing PPB’s group earnings to dip 46% year-on-year to RM302 million.

Both stocks rebounded last week after news got out that Wilmar made its first-ever share buyback on Sept 13, paying S$3 (RM7.50) apiece or S$22.19 million to purchase 7.39 million shares or 0.115% of its share base from the market.

As for PPB, Bursa Malaysia filings showed the Employees Provident Fund (EPF) among recent buyers of PPB shares as its stock plunged. The EPF had 9.92% of PPB as at Sept 6, up from 9.65% in late February.

For his part, Lim said PPB does not expect significant changes in contribution mix from its six business segments in the near term but promised PPB is working hard to grow its core businesses.


Of the RM104 million profit from PPB’s own businesses in the first half of 2012, some 63.5% were from grains trading and flour milling. Film exhibition and distribution contributed 18.8% to group earnings; properties 12.53%; consumer products 8.37%, waste management 4.88%, while the livestock business was loss-making.

He also gave little hints on whether PPB would consider spinning off GSC to get PPB back on the syariah-compliant investment list, and declined to outline a specific dividend policy for PPB apart from a commitment to return excesses to shareholders after considering its capital needs.

Some RM467 million has been earmarked to expand its flour, cinema and property businesses over the next two years, some 73% of which is to expand its flour businesses in China, Vietnam and Indonesia.

It is worth noting, though, that PPB and Wilmar were bound even more tightly together in December 2010 after PPB sold a 20% stake in its flour milling arm FFM Bhd to Wilmar. In return, FFM bought a 20%
stake in Wilmar’s flour milling businesses in China where flour mills are built to make other products like instant noodles as well.

Wilmar, which has some 50% of China’s branded cooking oil business, is keen to leverage its distribution strength to market other consumer products. On Sept 24, for instance, Wilmar announced a joint venture with New York-listed Kellogg Co, which owns the Kellogg’s and Pringles brands, to manufacture and distribute cereal and snacks in China.

The Kuok Group had just over 50% of PPB and about 32.35% of Wilmar as at May this year, including the 18.32% held by PPB. While Lim said PPB has no immediate intention of raising its interest in Wilmar, Singapore takeover rules allow the Kuok Group to buy up to 2% of Wilmar shares every six months without triggering a buyout. Singapore’s mandatory offer threshold is 30% and not 33%, as in Malaysia.

Some market watchers expect more of Robert Kuok’s agriculture and consumer-related businesses to eventually find their way into Wilmar’s fold, pointing out that PPB and Wilmar are already working together to expand the flour businesses in the region.

Analysts, however, are looking out for signs of a turnaround at Wilmar.

If Wilmar succeeds in beating expectations, PPB — which is among 144 companies that qualified as members of The Edge Billion Ringgit Club (BRC) for 2012 — would stand to gain.

This article is appeared in The Edge Financial Daily on 25 September, 2012.

Wilmar results miss forecasts

SINGAPORE: Wilmar International, the world's largest palm oil plantation firm by market value, reported a 28 per cent decline in quarterly earnings on losses from it oilseeds and grains units, missing forecasts and knocking its shares down 5 per cent.

Wilmar, which earns more than half of its revenue from China, said it is optimistic about the outlook for 2011, with commodity prices expected to remain firm. Still, analysts say the company faces huge pressure on its margins from rising food prices that have pushed up its feed stock costs, while price caps in China are preventing it from passing on increases to customers.

Wilmar shares fell as much as 5 percent to S$5.14 (S$1 = RM2.39), its lowest since mid-2009. Shares of Wilmar were 4.4 per cent lower at S$5.17 at 0730 GMT. They have lost about 8 per cent since the start of the year.

"The numbers are significantly below consensus and our forecasts. The sole factor to that is two consecutive quarterly losses in their oilseeds and grains division," said a Singapore-based analyst, who declined to be identified because he is not authorised to speak to the media.

"The way the company blamed this on weak margins and inopportune buying is kind of a euphemism for 'we got it wrong'."

Wilmar's palm oil plantations in Indonesia and Malaysia supply less than 10 per cent of the demand of its refineries, while logistical and regulatory challenges prevent the company from expanding plantation area.

Wilmar, which has a market value of US$27 billion (US$1 = RM3.05), booked an October-December net profit of US$318.6 million, down from US$442 million a year ago, missing analysts' forecasts of US$378 million.

The company's oilseeds and grains business reported a pre-tax loss of US$173.2 million in the fourth quarter, despite a 15.9 per cent increase in revenue to US$3 billion, and 4.2 per cent increase in volume.

Wilmar said in the statement that the performance of the oilseeds and grains business reflected "very poor crush margins from excessive imports of beans by the industry and the group's less timely purchases of raw materials."

Its consumer products division registered a 33.4 per cent decline in the fourth quarter to US$37.5 million, also on weaker margins due to rising prices of edible oils feedstock, despite a 29.3 per cent rise in revenue.

"The key disappointment came from the larger losses in soyabean crushing despite earlier management guidance that the third quarter would be the worst quarter for this division," brokerage house UOB Kay Hian said in a note to clients.

Wilmar's chairman and chief executive Kuok Khoon Hong said in a statement that the group was optimistic about 2011 despite the weaker performance. - Reuters

Read more: Wilmar results miss forecasts http://www.btimes.com.my/Current_News/BTIMES/articles/wilmo/Article/#ixzz1ErrABh95

Kuok's Wilmar International - More money was natural sweetener

More money was natural sweetener
July 6, 2010

KUOK Khoon Hong is clearly far more loved by the Singaporean sharemarket than CSR is locally. How else to explain why CSR's surprise $1.75 billion sale of its namesake sugar business to Kuok's Wilmar International yesterday added almost $800 million to the market value of his company, yet added barely $80 million to the seller, which is pocketing a lot more cash than it had expected?

Wilmar wrong-footed China's Bright Food, which had been bidding since January, by offering more money. Kuok's team was apparently so confident that it had Minter Ellison partner Leigh Brown, who specialises in advising clients on Asian deals, register a corporate structure here last Thursday.

Kuok is these days ranked as Singapore's third-richest man, with about $US3.5 billion ($A4.2 billion), according to Forbes, although he still has some catching up to do on uncle Robert Kuok's $US13.5 billion.

Most of his wealth comes from Wilmar, which is worth $S38 billion ($A34 billion) and now claims the title of Asia's largest agribusiness group. Wilmar was put together by Kuok, with assets from Uncle Robert, business partner and grain trader Martua Sitorus, and the Chinese grain business of Illinois-based Archer Daniels Midland. It has been a profitable exercise for all (and for Kuok's broker mate Peter Lim, who is now a billionaire after putting $10 million into the compliance listing in 2006), and Kuok is well-liked in his home town.

There are critics of Wilmar on the environmental front because its palm oil operations in Indonesia are viewed as contributing to the endangerment of orangutan habitats. The company has strenuously defended its practices.

Wilmar already had a minor presence in sugar in Australia after buying the Brisbane Sugar Terminal in a joint venture last year, but it will now own not just a vertically integrated producing business but a big foothold in the pantries of Australian households - and a great launching pad for meeting increasing demand in China and other developing Asian nations.

The biggest hurdle the deal faces is clearing the Foreign Investment Review Board, which is really only a cypher for government policy. When Shanghai's Bright Food first made its initial $1.5 billion offer for the CSR business in mid-January, the deal was caught up in a whiff of xenophobia over state-owned entities buying more of the Australian ''farm''.

Wilmar's purchase does not carry any of that baggage, although Treasurer Wayne Swan and Prime Minister Julia Gillard will be keenly conscious of public opinion when they consider whether to approve the sale, given the deal's proximity to the federal election and the pivotal role Queensland electorates will play in the outcome.

CSR chairman Ian Blackburne and interim chief executive Jeremy Sutcliffe also get to pop along to the annual meeting in a couple of days armed with much better news than having to vote on the contentious plan to float the sugar unit as a separate company.

The trick now will be to harvest enough of the sale money to ensure that the courts and public are satisfied CSR is properly providing for potential victims of its now defunct asbestos operations.

They can now say that some time later this year, once the asbestos issue has been resolved, the company will be thinking about what the most tax-effective reward will be for investors - it may be more complicated than a capital return because it will depend on how the Tax Office views proceeds from the sale.

Already CSR is budgeting for about $150 million in costs. Much of that will be capital gains tax, followed by legal fees, although a substantial amount will be in the form of success fees to Lazard and UBS, which ran the sale (Goldman Sachs dropped out of the game earlier this year).

The sale had a few other interesting outcomes. Someone in the Bright Food camp clearly believed it was the right strategy to leak details of its offer to the media over the weekend, possibly hoping that publicising its decision to bid a lower price than the $1.75 billion mooted in April would clear the field of rivals.

In the end, they must have felt a little silly when CSR chief Sutcliffe made the courtesy phone call yesterday morning telling them they had been beaten by Wilmar (he had already rung Kuok's office). Asked about the Bright Food leak, Sutcliffe referred to the preparedness of some to breach confidentialities.

He also made repeated references to the ''uncertainty'' in Bright Food's offer, without ever spelling out whether that reflected the bid's conditions or CSR's reading of conditions in the FIRB and Canberra on what hoops a state-owned entity might have to jump through.

The second beneficial outcome is that we have, hopefully, been saved from the listing of a company called ''Sucrogen'' - which sounds more like an artificial sweetener than the real thing.

Sucrogen boss Ian Glasson, who was hoping to head up his own listed company if it had instead floated, probably disagrees.

Finally, ANZ chief Mike Smith will no doubt be congratulating Glenn Porritt and his mergers and acquisitions team, which was the successful advisory team for Wilmar. As long as there are no hitches, a relationship with the Kuoks will not hurt his Asian expansion ambitions for the bank.

Source: The Age

Analysts differ on Wilmar’s prospects post scam claims

Analysts differ on Wilmar’s prospects post scam claims
By Lee Wei Lian May 20, 2010

KUALA LUMPUR, May 20 — Analysts differed on the outlook for plantation giant Wilmar International Ltd following allegations of tax fraud.

Wilmar was alleged to have colluded with Indonesian tax officials to claim tax rebates worth 3.6 trillion rupiahs or RM1.24 billion, but Wilmar has said that its internal records will stand up to scrutiny.

Research house OSK Research said in a report today that shares of Wilmar could be a bargain after the counter fell by nearly 7 per cent yesterday on the Singapore stock exchange and that it was encouraged by Wilmar’s strong stand on the allegations.

“Should the company be able to sort out the issue, the stock will be a bargain even at these levels,” said OSK Research. “While the stock may still weaken somewhat from here, we believe it is now cheap enough for investors to start nibbling on.”

The report also noted that Wilmar has clarified that its COO Martua Sitorus is not personally under investigation for tax fraud allegations.

“We believe the market will be relieved as Martua was the person who spearheaded Wilmar’s expansion in Indonesia,” said OSK Research which maintained its “Buy” call on Wilmar.

A separate report by a local research house said that Wilmar shares will be affected by uncertainties arising from the allegations and said that if the RM1.24 billion in tax rebates were to be charged to Wilmar’s profit and loss account, it would reduce the group’s 2010 profits by 23 per cent.

“What is more detrimental is the reputational damage to the group,” said the research house. “We wonder if the Chinese government would start scrutinising Wilmar’s tax payments and accounts due to the allegations in Indonesia.”

The research house maintained a “hold” call on Wilmar due to potential earnings disappointment from lower operating margins, the impact of a potential slowdown in the China market which accounts for 70 per cent of Wilmar’s earnings and uncertainties arising from the tax claim allegations.

PBB Group Berhad holds a 18.4 per cent stake in Wilmar and its shares dropped nearly six per cent yesterday on news on the allegations. Wilmar accounts for about 75 per cent of the PBB Group’s profits.

PBB Group said yesterday that the claims were still uncertain as investigations by Wilmar had yet to be concluded.

http://www.themalaysianinsider.com/business/article/analysts-differ-on-wilmars-prospects-post-scam-claims/#When:04:23:23Z

PPB falls on tax fraud allegations against Wilmar subsidiaries

PPB falls on tax fraud allegations against Wilmar subsidiaries
Written by Surin Murugiah
Wednesday, 19 May 2010 09:47


KUALA LUMPUR: PPB GROUP BHD [] in early trade on Wednesday, May 19 after its related company Singapore-listed Wilmar International's Indonesian subsidiaries were investigated for unlawful tax claims.

At 9.30am, it was down 42 sen to RM17.20 wiith 96,200 shares done.

PPB holds a 18.34% stake in Wilmar.

The Jakarta Post in Indonesia reported that some Indonesian subsidiaries of Wilmar are under probe for alleged unlawful value-added tax-restitution claims made by those subsidiaries in Indonesia.

Analysts said the news were negative as it could be detrimental to the group’s reputation among investors. The group, however, has categorically denied the allegations.


http://www.theedgemalaysia.com/business-news/166326-ppb-falls-after-tax-fraud-allegations-vs-wilmar-intl-.html

Wilmar shares fall as Jakarta Globe reports tax probe

Written by Bloomberg
Wednesday, 19 May 2010 12:06


Wilmar International, the world’s biggest palm-oil trader, fell by the most in 18 months in Singapore trading after the Jakarta Globe said its parent was being investigated in Indonesia.

The parent faces a probe for possible tax fraud involving as much 3.6 trillion rupiah ($548 million), the Jakarta Globe said yesterday, citing documents provided by lawmaker Bambang Soesatyo. Wilmar said the tax claims by media reports, which it didn’t identify, were “untrue and unsubstantiated.”

“This is likely a misunderstanding between Wilmar and the tax authorities,” Credit Suisse Group AG analyst Tan Ting Min wrote in a report today. “We believe that Wilmar’s share price will underperform until the issue is cleared up, which could take months.” Tan downgraded the stock to “underperform” from “neutral.”

Wilmar fell as much as 8.7%, the worst drop since November 2008, to $5.65, and traded at $5.80 at 10:59 a.m. in Singapore. The decline of Singapore’s second-largest stock by market value helped dragged the benchmark index down 1.7%.

“The company is fully confident that its subsidiaries are and have at all times been in full compliance with all relevant Indonesian value-added tax laws,” Wilmar said in a statement yesterday to the Singapore exchange. Its units exported more than US$3 billion ($4.18 billion) worth of palm oil in the last three fiscal years, entitling them to claim 10% value-added tax paid on the cost of the sales, it said.

CHINESE CONCERNS
Wilmar is the largest exporter of palm oil from Indonesia. The company is also the biggest provider of cooking oil in China, with the nation accounting for 55% of sales last year.

“What is more detrimental is the reputational damage to the group,” an AmResearch Sdn. report said. “We wonder if the Chinese government would start scrutinizing Wilmar’s tax payments and accounts due to the allegations in Indonesia.”

CIMB Investment Bank Bhd. analyst Ivy Ng cut her 12-month target to $7.85 from $8.40 “to account for potential weak near-term sentiment” and as the earnings forecast could be reduced by 22% in the “worst-case scenario” of the company returning US$385 million to the government for tax refunds received in the past three years.

http://www.theedgesingapore.com/the-daily-edge/business/15899-wilmar-shares-fall-as-jakarta-globe-reports-tax-probe-update.html

Wilmar's Q1 net beats forecast, upbeat on Asia

Wilmar's Q1 net beats forecast, upbeat on Asia

2010/05/13

SINGAPORE: Wilmar International, the world's largest listed palm oil firm, said it is positive on growth in Asian markets such as China and Indonesia after posting a better-than-expected 6 per cent rise in first quarter profits.

Wilmar, whose operations span from palm oil plantations in Malaysia to processing plants for soya and rice in China, generates around half of its revenue from China and is expected to benefit from strong Asian consumer demand growth.

"The group is positive on the prospects of Asian economies, especially China, India and Indonesia, and will continue to leverage on its well-established presence in these markets for growth," said Wilmar chairman and chief executive officer Kuok Khoon Hong.

Wilmar said late last year it wanted to invest at least US$1 billion in Indonesia, China and Africa, including starting up a sugar plantation in Indonesia, the world's fourth most populous country, this year.

The company, which has a market value of US$30 billion (US$1 = RM3.22), earned US$401 million in January-March, up from US$380 million made a year ago. The earnings were higher than the average forecast of US$385 million provided by three analysts surveyed by Reuters.

The profit rise was the smallest in years after Wilmar's string of double-digit earnings gains even during the financial crisis.

Its first quarter revenue climbed 36 per cent to US$6.8 billion.

The company said its palm and laurics business recorded a 30 per cent drop in pre-tax profit, despite a 29 per cent rise in sales volume, as margins fell due to tight supply and relatively less competitive pricing of palm oil compared to other edible oils.

Its oilseeds and grains business also recorded slightly lower margins but registered an 8 per cent rise in pre-tax profit as sales volumes rose by 12 per cent.

Wilmar's integrated China operations account for 44.7 per cent of its US$10.3 billion assets, and it competes with China Agri Industries and China Foods in a market with more than 1 billion people.

It also has plantation assets in Southeast Asia, competing with regional players such as Malaysia's Sime Darby, IOI Group and Indonesia's Astra Agro Lestari.

Malaysia's benchmark palm oil price declined by nearly 6 per cent since the start of the year, after soaring 57 per cent in 2009 as the global economy started to recover from the recession.

Wilmar shares have risen 1.7 per cent since the start of the year, outperforming a 1.4 per cent fall in the Singapore's Straits Times Index. - Reuters

Wilmar: Asia’s next Cargill in China?

Wilmar: Asia’s next Cargill in China?


KUALA LUMPUR, May 3 — Singapore-listed Wilmar is shaping up to become the Asian version of agribusiness giant Cargill, with an expanding network of farms, food processors and shipping companies.

And it’s showing its muscle where it matters most — in China.

Wilmar’s integrated China operations account for 44.7 per cent of its US$10.3 billion (RM32.79 billion) assets, allowing it to weather recent volatile food prices and now a likely yuan policy change.

The company had the most to gain when Beijing in April slapped import curbs on Argentine soyoil — a commodity that competes with Wilmar’s domestically crushed oilseeds in China and imported palm oil.

This resilience has spurred investors to clamour for Wilmar to revisit a shelved IPO for its China business, possibly this year, four years after the powerful Kuok family merged Wilmar and Malaysia-based Kuok Group to create the US$32 billion firm.

“I believe they will revisit the IPO. It’s anybody’s guess when it happens, but Wilmar has rightly tapped into the fact that agriculture is super-hot in China,” said Michael Greenall, an analyst with BNP Paribas.

“With the super-charged growth in China’s economy, higher incomes and rural-to-urban migration contributing to stronger demand in all the sectors it’s invested in, Wilmar will act.”

Wilmar’s proposed China listing would have raised as much as US$3.5 billion on the Hong Kong stock exchange, at the lower end of the range of China-based food companies.

Wilmar, which has been dubbed by analysts as the “China proxy”, currently trades at 18 times its 2010 earnings, richer than rival China Agri Industries’ 14 times but cheaper than 22 times at China Foods.

Wilmar’s shares have gained more than 8 per cent this year, outperforming a 2.5 per cent rise on Singapore’s benchmark index, while other plantation firms such as Malaysia’s Sime Darby, IOI Group and Indonesia’s Astra Agro Lestari are trading lower.

Margins in Wilmar’s main business sectors — oilseeds and grains, palm and laurics and consumer food products — certainly have room to grow as the world’s most populous country and third-largest economy keeps to its target of 8 per cent annual growth.

YUAN BOOST?

An immediate margin boost may come from a yuan policy shift that could make imported soybeans cheaper for Wilmar — a top importer that dominates a fifth of China’s 94 million tonnes of soy processing capacity.

It also buffers Wilmar from negative margins arising from weak livestock feed demand for soymeal, as the food processor can channel soyoil into its cooking oil business that controls 45 per cent of China’s market.

In contrast, the influx of cheap soy imports may further weigh on smaller crushers that have tiny integrated downstream operations. Some have none to speak of.

Soyoil accounts for a quarter of China’s 6.4 million tonnes of edible oil imports, and Wilmar makes up the rest with palm oil from its estates in Southeast Asia, taking a larger market share than Sime and IOI.

Analysts say a Wilmar IPO will bring all these factors into play.


“Wilmar is one of its kind. They are not only selling to China but they also know the supply side (because) they have estates in Malaysian and Indonesia,” said Ivy Ng, an analyst with Malaysia’s CIMB Investment Bank.

“If you look at China Agri, they don’t have any estates, they buy palm, process and sell.”

Wilmar’s plantation landbank of 570,000 hectares is just 41 per cent planted, and analysts say the planting will rise in tandem with China’s growing appetite for edible oils and palm oil getting cheaper if Beijing lets its currency appreciate.

The scale of its operations — 130 processors and plants in China — allows Wilmar to manage the fluctuations in soybeans and palm oil and preserve earnings.

A 10 per cent change in the price of palm oil only affects the company’s 2010 earnings by 2 per cent, Goldman Sachs said in a note. Other analysts say such a swing affects earnings of purer plantation plays such as Astra Agro Lestari by 13 per cent.

TURNING TO RICE AND WHEAT

The major risk to Wilmar’s growth is that it will eventually come up against regulations stipulating that foreign firms cannot own new soy processors and those with a soy market share of more than 15 per cent will not get approval to expand capacity.

But analysts are still pricing in an upside to Wilmar’s share price, which surged 130 per cent in 2009. The Thomson Reuters I/B/E/S survey of 19 analysts has an average target price for Wilmar of S$7.80 (RM18.13) — a 13 per cent gain from its current level.

Much of the optimism lies with Wilmar’s aggressive move into China’s highly fragmented rice and wheat milling sectors, which are the world’s largest, and also produce noodles and pastries.

“They have been investing a lot in rice and flour in China, which can become very big,” Nomura analyst Tanuj Shori said.

“The biggest entry barrier is scale. The bigger you are, the easier it is to achieve higher profitability.”

China Agri leads with a 2 per cent market share in both sectors, but Wilmar can take top position as it can build mills at its existing manufacturing bases where it can share overheads and logistics, reducing costs and boosting margins, analysts say.

Backed by a balance sheet of US$23.5 billion, Wilmar can fund its rice and wheat expansion through its US$1 billion capex. China Agri plans to spend US$1.1 billion this year.

And Wilmar can channel wheat and rice products to its existing edible oil customers — noodle manufacturers Tingyi and Want Want.

“We believe Wilmar is capable of adding 4 million tonnes,” said Hwang-DBS analyst Ben Santoso, basing that on five 400,000 tonne capacity plants for both rice and flour.

“Compared to its last published capacity of 890,000 tonnes, it’s an extraordinary expansion.” — Reuters

Profile of PPB Group Bhd

Profile of PPB

Through organic growth as well as strategic acquisitions and JVs, PPB has become a well-diversified conglomerate engaged in a wide spectrum of activities ranging from:

• flour and feed milling, 
• environmental engineering and waste management, 
• shipping,
• film exhibition & distribution, and 
• property development.  

The disposals of PPB Oil and the group's edible oils, specialty fats, oleochemicals and trading business under PGEO Gp and Kuok Oils & Grains was completed end June 07.

As a result of this corporate exercise, PPB became the second largest shareholder in Wilmar International (Wilmar), owning 18.3% equity interest.  

• Wilmar is one of Asia's integrated agribusiness groups and is also a palm oil refiner.  
• Its products are delivered via a distribution network to more than 30 countries.

PBB disposed its sugar refining and cane plantations in 2010.

PPB Segmental Financial Information:
http://spreadsheets.google.com/pub?key=tJqIRRW5J2gACFSEWfPtYwQ&output=html

Source:  SPG Dynaquest

Singapore: Property developers, Wilmar, UOB, Cerebos, Raffles Medical, Midas

March 1: Property developers, Wilmar, UOB, Cerebos, Raffles Medical, Midas


Written by The Edge
Monday, 01 March 2010 08:46


Wilmar International (WLIL.SI), the world’s largest palm oil planter, is likely to be in the spotlight on Monday after reporting a better-than-expected 18% rise in its fourth-quarter results.

Benchmark Straits Times Index (.FTSTI) inched 0.06% higher to end at 2,750.86 points last Friday.

US stocks rose last Friday, capping their best monthly advance since November as data showed the economy grew a tad better than expected in the fourth quarter.

Property developers: The government said it will raise the cost of residential land development starting March 1. Non-landed residential charges will rise 8% on average, while charges for landed homes will increase 12% on average, it said in an e-mailed statement today. Charges for commercial land development will decline an average of 2%.

Wilmar International (WLIL.SI), the world’s largest palm oil planter reported on Sunday a better-than-expected 18% rise in fourth-quarter net profit as a global economic recovery drove commodities prices higher. It also said it would continue to seek attractive investment opportunities to support future growth.

United Overseas Bank (UOBH.SI) , Singapore’s third-biggest bank, expects high single-digit loan growth in 2010 and is trying to maintain loan margins for corporate customers, CEO Wee Ee Cheong told a news conference.

Singapore-listed health supplement manufacturer Cerebos Pacific (CERE.SI) said last week it is aiming for a 10–20% revenue growth over the next three years as it steps up its presence in China, Indonesia and Vietnam.

Raffles Medical Group, the private healthcare provider in Singapore and the region, says profit after tax for the group increased 20.1% from $31.7 million in 2008 to $38 million in 2009.

Midas Holdings, the manufacturer of aluminium alloy extrusion products for China’s railway sector, announced a 14.9% rise in net profit to $37.5 million for the financial year ended December 31, 2009 (FY2009).

Abterra, the supply chain manager of resources and minerals, managed to swing back into the black with a net profit of $13.3 million for the financial year ended 31 December 2009 (FY2009) largely due to a gain from the revaluation of a mining asset.

Yongnam Holdings, the structural steel contractor and specialist civil engineering solutions provider, announced a record profit before tax of $48.8 million for its full year ended December 31, 2009 (FY2009) on the back of a 2.7% increase in revenue to $346.8 million.

China Sports International, the sports fashion footwear and apparel company based in China, reported net profit decreased by 33.7% to RMB122.6 million ($25.3 million) for the full year ended 31 December 2009 (FY09) from RMB184.9 million in FY08 as the result of lower average selling prices for footwear products.

Delong Holdings, the manufacturer of hot-rolled steel coils (HRC) in China, says it posted a net profit after tax of RMB 248.4 million and RMB 416.9 million ($86 million) for the fourth quarter (4Q2009) and full year (FY2009) respectively, reversing net losses of RMB 637 million and RMB 370.4 million recorded in 4Q2008 and FY2008 respectively.

Synear Food Holdings, the China-based producer of quick freeze food, today posted a more than two-fold surge in net profit to RMB40.7 million ($8.4 million) for the three months ended December 31, 2009 (4Q09), due mainly to lower selling and distribution expenses and lower income tax expense. Revenue for the quarter rose 1.1% to RMB507.1 million.

Food Empire Holdings, the manufacturer of instant beverage products, frozen convenience food, confectionery and snack food, says profit before tax fell 86.2% to US$3.2 million ($4.5 million) while revenue fell 39.3% to US$134 million and for the year ended 31 December 2009.

Apex-Pal International, which operates the global chain of Sakae Sushi restaurants, today reported a net profit before tax of $3.3 million for the fiscal full year ending on 31 December 2009.

Techcomp (Holdings), the China manufacturer and distributor for analytical and life science instruments, posted a 139.4% year-on-year rise in net profit attributable to shareholders to US$7.4 million ($10.4 million) for the 12 months ended 31 December 2009 (FY2009). Revenue increased 29.3% to US$104.8 million fuelled by Asia’s increasing demand for analytical and life science equipment.

http://www.theedgesingapore.com/the-daily-edge/business/13008-march-1-property-developers-wilmar-uob-cerebos-raffles-medical-midas.html

Wilmar says Q4 net profit up 18% to US$442m

Wilmar says Q4 net profit up 18% to US$442m

Tags: Wilmar | Wilmar International
Written by Thomson Reuters
Sunday, 28 February 2010 18:05


Wilmar International (WLIL.SI), the world’s largest palm oil producer, reported today a better-than-expected 18 percent rise in fourth quarter net profit as a global economic recovery drove commodities prices higher.

The company, which has a presence in 20 countries across Southeast Asia, China, India, Europe and Africa, said it would continue to seek attractive investment opportunities to support future growth.

Malaysia’s benchmark palm oil price (KPOc3) rose nearly 60% in the quarter compared with the previous year.

The firm derives about half of its total sales from China, and owns oil palm plantations and runs crushing and refining plants in Indonesia and Malaysia.

“We will persist with on-going efforts to further improve our operational efficiency through greater integration and economies of scale, and seek attractive investment opportunities to continue growing our group,” said Chief Executive Kuok Khoon Hong in a statement.

The company did not elaborate on its future investment plans, but it has previously said it was planning to invest at least US$1 billion ($1.4 billion) in Indonesia, China, and Africa.

Wilmar posted a net profit of US$442 million, up from US$373.6 million a year earlier, ahead analysts forecasts of US$333.5 million.

The quarterly results took the full year net profit to US$1.88 billion, higher than ThomsonReuters I/B/E/S estimates of US$1.65 billion.

On the outlook, Wilmar, which has a market capitalisation of $41.5 billion, said that although economic recovery appeared to have started, the global business environment is expected to be volatile.

However, the company said Asian economic activity would continue to remain robust, especially in China, India and Indonesia.

Wilmar’s shares have risen around 1% since the start of the year, outpacing a 5% drop in the broader Straits Times index (.FTSTI).

http://www.theedgesingapore.com/the-daily-edge/business/13007-wilmar-says-q4-net-profit-up-18-to-us442m.html

Singapore’s Wilmar says Q4 net profit up 18pc

SINGAPORE, Feb 28 – Wilmar International, the World's largest palm oil producer, reported on Sunday a better-than-expected 18 per cent rise in fourth quarter net profit as a global economic recovery drove commodities prices higher.

The company, which has a presence in 20 countries across Southeast Asia, China, India, Europe and Africa, said it would continue to seek attractive investment opportunities to support future growth.

Wilmar posted a net profit of $442 million, up from $373.6 million a year earlier, ahead analysts forecasts of $333.5 million.

The quarterly results took the full year net profit to $1.88 billion, higher than ThomsonReuters I/B/E/S estimates of $1.65 billion. – Reuters

Some Singapore Property stocks, Genting, NOL, SPH, Wilmar

Feb 22: Property stocks, Genting, NOL, SPH

Written by The Edge
Monday, 22 February 2010 08:24

Last Friday, the Straits Times Index dropped 0.4% to 2,757.14.

Asian investors are likely to be wary ahead of the opening of Shanghai shares on Monday after a week-long holiday for the Lunar New Year, but last week’s gains on Wall Street could offset any negative sentiment.

The following companies may have unusual price changes in trading today. Prices are from Friday’s close.

Property stocks could be hit after the government imposed a new stamp duty on homes sold within one year of purchase and capped the maximum housing loan at 80% of the property value, measures aimed at cooling the property market.

CapitaLand (CAPL SP), Southeast Asia’s biggest developer, lost 0.5% to $3.90. City Developments (CIT SP), the island-nation’s second-biggest developer, dropped 1.5% to $10.82. Keppel Land (KPLD SP), the developer part-owned by Keppel Corp. (KEP SP), declined 1.8% to $3.37.

Palm-oil suppliers: Crude palm oil for May delivery dropped 0.2% in Kuala Lumpur on Feb. 19, taking losses in the past two days to 1.2%. Golden Agri-Resources (GGR SP), the world’s second-biggest palm oil producer, slid 0.9% to 54.5 cents. Wilmar International (WIL SP), the world’s biggest palm oil trader, gained 1.3% to $6.39.

Genting Singapore Plc. (GENS SP): The owner of Singapore’s first casino said its net loss doubled to $277.6 million last year from $124.8 million in 2008 as gambling revenue in London declined and staff costs increased. Genting fell 1.1% to 94 cents.

Neptune Orient Lines (NOL SP): Southeast Asia’s biggest container carrier said its APL unit will raise rates on intra-Asian routes from March 1. NOL slipped 0.6% to $1.66.

Singapore Press Holdings (SPRM.SI) announced early today it was setting up a $1 billion multi-currency notes programme and will sell at least $300 million of five bonds via lead manager OCBC (OCBC.SI).

Bulk carriers: The Baltic Dry Index, which measures the cost of shipping commodities, gained 0.4% in London on Feb. 19, extending a four-day rally to 5.8%. Cosco Corp. Singapore (COS SP), a China-based shipbuilder that also operates bulk carriers, was unchanged at $1.27. STX Pan Ocean Co. (STX SP), South Korea’s biggest bulk carrier, dropped 1.3% to $13.80.

http://www.theedgesingapore.com/the-daily-edge/business/12720-feb-22-property-stocks-genting-nol-sph.html

Wilmar Delays $3.5 Bln China IPO, to Invest in Africa

Food Industry News


Wilmar Delays $3.5 Bln China IPO, to Invest in Africa
Source: Reuters
12/11/2009

Singapore, Nov 12 - Wilmar International, the world's largest listed palm oil firm, signalled a promising outlook for its earnings but said the $3.5 billion listing of its China unit is on hold due to its concern over valuations.

The palmoil giant's listing plan was the recent trigger for a rally in its shares, which retreated on Thursday despite a quarterly profit that beat expectations.

"We will shelve it for the time being and wait for market conditions to improve," Wilmar's Chairman and CEO Kuok Khoon Hong told Reuters after a media and analysts' briefing for its third quarter results.

"We only will list the China operation if it commands better price than what Wilmar is commanding right now in the stock market," he added.

Analysts have estimated that Wilmar's China unit could be valued as by much as 20 times earnings, matching the parent company's current price-to-earnings multiple.

With more than 30 firms eyeing listings in either Hong Kong or India over the next few months, leading to more than $10 billion in share sales, companies wanting to list have had to keep their hopes for high prices in check..

Analysts have said Wilmar, which has a market value of $30 billion, has no immediate need for funds.

The company said it was optimistic about prospects for the rest of this year after a one-off gain helped it post a better-than-expected 35 percent rise in its third quarter profit.

Analysts were less impressed.

"Excluding exceptional and one-off items, Wilmar's operating performance in 3Q09 was not as strong as we would expect from normal seasonality," Goldman Sachs analyst Patrick Tiah said in a research note.

"Notwithstanding, given the market's low expectations we believe consensus earnings could rise following the results," he added.

Wilmar's Kuok said the company plans to invest at least $1 billion in China, Indonesia and Africa to expand its plantations and plants.

The company has raised profits in the last few quarters thanks to its processing and refining capabilities, outperforming rival palm oil firms that depend primarily on plantations.

LISTING

Wilmar's shares have more than doubled this year, but some analysts cut their ratings after the company delayed plans in late September to float its China unit due to volatile markets. The listing would have raised around $3.5 billion.

CEO Kuok said earlier in a statement that he was optimistic about the firm's prospects for the rest of the financial year given the diversity of its business segments.

Wilmar, derives about half of its total sales from China, and owns oil palm plantations and runs crushing and refining plants in Indonesia and Malaysia.

The company, the second-largest on the Singapore Exchange after Singapore Telecommunications, earned $653 million in July-September, up from $483 million a year ago.

Wilmar's earnings were higher than the average forecast of $500 million provided by three analysts surveyed by Reuters.

Wilmar's shares have jumped 136 percent so far this year, outperforming the broader index which rose around 54 percent.

On Thursday its share price traded 1.06 percent lower while the broader market was down by 0.4 percent.

http://www.flex-news-food.com/pages/26906/Palm-Oil/Singapore/wilmar-delays-$35-bln-china-ipo-invest-africa.html

Wilmar delays China IPO, to invest in Africa

Wilmar delays China IPO, to invest in Africa
Published: 2009/11/13

SINGAPORE: Wilmar International, the world's largest listed palm oil firm, signalled a promising outlook for its earnings but said the US$3.5 billion (US$1 = RM3.38) listing of its China unit is on hold due to its concern over valuations.

The palm oil giant's listing plan was the recent trigger for a rally in its shares, which retreated yesterday despite a quarterly profit that beat expectations.

"We will shelve it for the time being and wait for market conditions to improve," Wilmar's chairman and CEO Kuok Khoon Hong said after a media and analysts' briefing for its third-quarter results.

"We only will list the China operation if it commands better price than what Wilmar is commanding right now in the stock market," he added.

Analysts have estimated that Wilmar's China unit could be valued as by much as 20 times earnings, matching the parent company's current price-to-earnings multiple.

With more than 30 firms eyeing listings in either Hong Kong or India over the next few months, leading to more than US$10 billion in share sales, companies wanting to list have had to keep their hopes for high prices in check.

Analysts have said Wilmar, which has a market value of US$30 billion, has no immediate need for funds.

The company said it was optimistic about prospects for the rest of this year after a one-off gain helped it post a better-than-expected 35 per cent rise in its third quarter profit.

Analysts were less impressed. "Excluding exceptional and one-off items, Wilmar's operating performance in its third quarter 2009 was not as strong as we would expect from normal seasonality," Goldman Sachs analyst Patrick Tiah said in a research note.

"Notwithstanding, given the market's low expectations we believe consensus earnings could rise following the results," he added.

Wilmar's Kuok said the company plans to invest at least US$1 billion in China, Indonesia and Africa to expand its plantations and plants.

The company has raised profits in the last few quarters thanks to its processing and refining capabilities, outperforming rival palm oil firms that depend primarily on plantations.

Wilmar's shares have more than doubled this year, but some analysts cut their ratings after the company delayed plans in late September to float its China unit due to volatile markets.

The listing would have raised around US$3.5 billion.

CEO Kuok said earlier in a statement that he was optimistic about the firm's prospects for the rest of the financial year given the diversity of its business segments.

Wilmar, derives about half of its total sales from China, and owns oil palm plantations and runs crushing and refining plants in Indonesia and Malaysia.

The company, the second-largest on the Singapore Exchange after Singapore Telecommunications, earned US$653 million in July-September, up from US $483 million a year ago. - Reuters

PPB may use sugar proceeds to invest in Wilmar China

PPB may use sugar proceeds to invest in Wilmar China

Tags: HKEX | OSK Research | PPB Group Bhd | Wilmar China | Wilmar International

Written by Melody Song
Tuesday, 03 November 2009 11:17

KUALA LUMPUR: PPB GROUP BHD [] may utilise the RM1.29 billion proceeds from the sale of its sugar refining and trading business in Malaysia, to subscribe for shares in Wilmar China, according to OSK Research.

The research firm believes that by investing in Wilmar China, which is planning an initial public offering (IPO) on the Hong Kong Exchange (HKEX), PPB will get “a bigger bang for the buck”, compared to buying additional shares in Wilmar International Ltd.

PPB had in an announcement last Friday said it would channel the proceeds to make strategic investments rather than distribute them as special dividends to shareholders.

The announcement was pertaining to PPB’s proposed divestment to Felda Global Ventures Holdings Sdn Bhd of all its sugar refining and trading business in Malaysia, comprising a 100% stake in Malayan Sugar Manufacturing Sdn Bhd, 50% stake in Kilang Gula Felda Perlis Sdn Bhd and 5,797ha of land in Perlis, for a total consideration of RM1.29 billion.

According to OSK, PPB currently owns 18.22% stake in Wilmar International, which is planning to float its China operation under Wilmar China on the HKEX.

“If PPB were to raise its investment in Wilmar International, it would only be able to buy an additional 1.3% based on the current price,” said OSK in a note yesterday, citing that PPB’s chairman had mentioned the group would only raise stakes in Wilmar International if the price were right.

“We doubt that the proceeds would be used to buy into Wilmar International given that the additional stake (of 1.3%) will only raise PPB’s pre-tax profit by RM59.5 million (based on our estimates) compared to about RM165 million (in pre-tax profits) forgone from its sugar refining and trading business. Moreover, PPB is already equity-accounting Wilmar International’s contribution,” noted OSK.

Hence, the research firm believed that the company would rather invest the proceeds to subscribe for the IPO shares of Wilmar China.

OSK said PPB’s 18.22% stake in Wilmar International is worth RM17.86 billion compared to its own market capitalisation of RM17.95 billion.

“Assuming zero value for its other businesses, PPB’s revised net asset value (RNAV) is estimated at RM19.29 billion, taking into consideration its net cash of RM140.96 million and the sale proceeds of RM1.29 billion. Hence PPB is trading at a narrow 7% discount to its RNAV,” said OSK.

PPB closed 20 sen or 1.32% higher at RM15.34 yesterday.


This article appeared in The Edge Financial Daily, November 3, 2009.

3A: More details needed on potential JV

3A: More details needed on potential JV

Tags: InsiderAsia | Three-A Resources

Written by InsiderAsia
Tuesday, 20 October 2009 16:12



FOOD ingredient products manufacturer, Three-A Resources (3A, RM1.58) has hogged more than its fair share of the limelight over the past few weeks. Its share price has risen by more than five-fold in the year to date, most of its gains coming in the past month, on the back of high trading volumes.

The primarily catalyst was news that Singapore-listed Wilmar International Ltd will invest in the company via a private placement of 61.6 million shares. The shares were priced at 75 sen per share, which will raise RM46.2 million cash proceeds for 3A. Upon completion, Wilmar will hold a 16.67% equity stake in the company.

More importantly, the placement exercise is widely seen as the precursor to a closer business partnership in the future. 3A has suggested the possibility of the two companies setting up manufacturing facilities for food ingredient products in neighbouring countries, such as China.

Private placement a precursor to future JV?
Wilmar is one of the world's largest refiners and traders for crude palm oil. It is also a leading distributor of staple food, such as cooking oil, flour, rice and bottled mineral water, in China. Its extensive network, both upstream and downstream, is expected to work just as well for food ingredient products.

3A is already the leading ingredient products manufacturer in Malaysia. Its main products include caramel colour, glucose and maltose syrup as well as owning our country's only maltodextrin plant. Business has been growing at a rapid pace. The company's sales expanded at a compounded rate of 30% per annum between 2003-2008. Plans for the next few years will further underpin growth, forecast to be in the double-digit range annually.

Success in the overseas markets is another acknowledgement of the company's product quality. Its ingredient products are sold to countries such as Korea, Taiwan, Singapore, Australia and the Philippines. Exports currently account for about one-third of the company's sales.
In short, 3A has established a good reputation and track record after being in the business for more than three decades.
Partnership with Wilmar will help 3A penetrate the world's most populous market more effectively and significantly expand its business operations beyond the local shore.

Devil is in the details
Nonetheless, discussions on any overseas joint ventures are believed to be in very preliminary stages. It is certainly too early to quantify future earnings stream. While Wilmar will undoubtedly give 3A a leg up in the Chinese market, we expect it will take time to convince manufacturers of end consumer products — such as soya sauce, confectionery and dairy products manufacturers — to switch from their existing supply source. Customers will require assurances on consistency of quality, production and delivery. For instance, new plants often encounter teething problems.
In other words, the process is not as simple as getting products on the shelves. In this sense, the steep rise in 3A's share price may have been a little premature.

Good longer-term growth prospects

To be sure, 3A's earnings are set to expand going forward. Its new 7,000-tonne per month glucose plant, completed in the fourth quarter of 2008 (4Q08), is registering rising utilisation. The 1,200-tonne per month maltodextrin plant is almost running at full capacity, thanks to the availability of glucose feedstock.

It is planning for a second maltodextrin plant with up to 2,000 tonnes per month capacity. If all goes to plan, the new plant will be operational by 4Q2010. Additional feedstock requirement for the new maltodextrin plant was already taken into account when 3A was building its glucose plant last year. The glucose plant can easily be upgraded to produce up to 12,000 tonnes per month with the incurrence of just a small additional capex.
3A's net profit is forecast to grow by 34% to RM16.2 million this year and a further 25% to RM20.2 million in 2010. That translates into earnings per share of 4.4 sen and 5.5 sen for 2009-2010 (after adjusting for the additional shares issued).

But valuations-rich pending further information
However, following the strong price rally, the stock is now trading at a relatively rich price-to-earnings (P/E) of 36 times and 28.9 times our estimated earnings for the two years.
Our forecast has not taken into account earnings from any future partnership ventures with Wilmar, which may or may not materialise. Hence, pending more concrete details, we are inclined to downgrade our recommendation from buy to hold, at least for now.

Note: This report is brought to you by Asia Analytica Sdn Bhd, a licensed investment adviser. Please exercise your own judgment or seek professional advice for your specific investment needs. We are not responsible for your investment decisions. Our shareholders, directors and employees may have positions in any of the stocks mentioned.


http://www.theedgemalaysia.com/business-news/151748-3a-more-details-needed-on-potential-jv.html

A boon for 3A in Wilmar

A boon for 3A in Wilmar

Tags: Fang Chew Ham | Three-A-Resources Bhd (3A) | Wilmar Intenational Ltd

Written by Cindy Yeap
Tuesday, 06 October 2009 10:46

KUALA LUMPUR: In a surprise move seen as further diversifying downstream, global PLANTATION [] player Wilmar International Ltd is set to emerge as the second-largest shareholder in food and beverage ingredients manufacturer THREE-A RESOURCES BHD [] (3A).

The exercise is the first step towards more partnerships ahead, including for potential joint overseas acquisitions, 3A, a nondescript Main Market company said in a statement to Bursa Malaysia yesterday.

Wilmar, a Singapore-listed plantation and palm oil processor, is set to pay RM46.2 million or 75 sen per share for a 16.67% stake in 3A’s enlarged share capital via a proposed private placement of up to 61.6 million shares, or 20% of its existing share base, 3A said.

“Wilmar has given a letter stating that it is interested to subscribe for 61.6 million placement shares at 75 sen per share… The proposed private placement is to enable 3A Resources and Wilmar to collectively venture into any future overseas investment,” 3A said in the statement.

The Malaysian company produces, among others, caramel colour, glucose syrup and soya protein sauce that are used in the processing of food. Its maltodextrin plant is the only one in the country and plans are underway to set up an additional plant by the end of next year, according to a note dated Aug 14 by Asia Analytica Sdn Bhd.

Maltodextrin is a white powder with little sweetness that is widely used as fillers or bulking agent.

After the completion of the placement, Wilmar, which recently delayed the listing of its Hong Kong unit, will end up as the second-largest shareholder in 3A.

The 75-sen indicative issue price represents a 12.63% discount to 3A’s five-day weighted average market price up to Oct 2 of 85.84 sen. The indicative issue price is at a 21.9% discount to 3A’s 96 sen closing price yesterday. The stock, which rose to as high as 97.5 sen intra-day yesterday, ended the day up 13.5 sen, or 16.36%, with 12.7 million shares done.

Standard & Poor’s has a hold recommendation on 3A with a 60 sen price target as at Aug 14, according to Bloomberg data.

The RM46.2 million proceeds from the private placement will be used as working capital as well as for “new overseas investment” after deducting some RM400,000 in estimated expenses, 3A said, without elaborating on the possible acquisitions abroad.

The indicative proceeds are set to boost 3A’s net asset per share to 34 sen from 26 sen as at Dec 31, 2009. The enlarged share base of 369.6 million shares (from 308 million shares currently) will also see its gearing fall to 0.36 times from 0.57 times.

The proposed private placement, which needs the approval of shareholders of the Malaysian company, is expected to be completed in the fourth quarter of 2009 and is not expected to have a material effect on earnings for the current year ending Dec 31, 2009, 3A said.

While 3A’s earnings per share (EPS) may see a corresponding reduction with the 20% larger share base, the company expects proceeds from the private placement to be used for overseas investments which are expected to contribute positively to future earnings.

Fang Chew Ham and family, currently 3A’s single largest shareholder, will see their collective shareholding diluted to 37.2% from 44.6% following the private placement. Lembaga Tabung Haji will become 3A’s third-largest shareholder with a 4.6% stake, down from 5.5% as at Sept 30, 2009.

3A has appointed OSK Investment Bank as adviser for the proposed private placement, and applications for the exercise will be submitted to the authorities within a month.

Wilmar, whose shareholders include the Kuok Group, fell six cents, or 0.98%, to S$6.05 with 6.8 million shares done yesterday. It had not made an announcement to the Singapore exchange at press time.


This article appeared in The Edge Financial Daily, October 6, 2009.