Cahya Mata Sarawak 1Q net profit up 50.7% to RM38.98m owing to OM Materials' turnaround

KUALA LUMPUR(May 15): Sarawak state infrastructure facilitator Cahya Mata Sarawak Bhd (CMSB) saw its net profit for the first quarter ended March 31, 2018 (1QFY18) surge 50.7% to RM38.98 million, from RM25.86 million a year ago.

In a filing to Bursa Malaysia, CMSB said its improvement in earnings was largely due to turnaround in its 25% associate OM Materials (Sarawak) Sdn Bhd, which operates a ferrosilicon and manganese alloy smelting plant in the Samalaju Industrial Park in Sarawak.

Revenue for 1QFY18 also increased by 15.4% to RM354.99 million and was mainly attributable to its construction and road maintenance, construction materials and cement divisions.

In a statement today, CMSB Group CEO — Corporate, Datuk Isaac Lugun, said the turnaround in O&M was buoyed by an improvement in commodity prices. He also attributed CMSB’s improvement in earnings, to better contributions from the group’s other associate companies.

“We believe that our growth strategy for our strategic investments, to drive the next wave of growth for CMSB Group, is beginning to come to fruition.

“The aim of this growth strategy is for our traditional core businesses and our strategic investments to equally contribute to double the group’s earnings in the next three to five years.

“For FY2018, we also expect to see upsides for quarry products and cement-based materials, as the Pan Borneo Highway project gathers momentum, therefore boosting earnings from our traditional core businesses,” Lugun said.

Lugun believes CMSB will continue to be the best proxy for Sarawak’s economic growth.

“With its healthy balance sheet, the group is well positioned to benefit in all key growth areas in the State: through OM in the Sarawak Corridor for Renewable Energy  initiative; through SACOFA Sdn Bhd in the state’s push to fully embrace the digital economy; and through PPES Works (Sarawak) Sdn Bhd and our construction materials supply companies in the roll-out of the Pan Borneo Highway project, other infrastructure projects and the state’s rural transformation plan,” Lugun added.

CMSB’s largest shareholders are the family of the Sarawak state governor Tun Abdul Taib Mahmud. Its share price fell 12.3%, compared with its pre GE-14 closing price of RM4.05, to RM3.55 at 12.30pm today. — theedgemarkets.com

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