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Financials_Property Development Division

Cahya Mata Sarawak Berhad’s Financial Performance for the First Six Months Of 2019

Kuching (Sarawak), 27 August 2019 – Cahya Mata Sarawak Berhad (CMSB – 2852) is pleased to announce its financial performance for the first six months of 2019 (1H 2019). The Group reported a total revenue of RM817.35 million for 1H 2019, representing an increase by 9% in comparison to the preceding year’s corresponding period’s (1H 2018) revenue of RM750.27 million. Its pre-tax profit (PBT) of RM128.06 million for 1H 2019 was, however, lower by 27% than 1H 2018’s PBT of RM175.94 million.

The Group’s profit after tax and non-controlling interests (PATNCI) of RM82.10 million for 1H 2019 was also 37% lower than 1H 2018’s PATNCI of RM130.60 million. Earnings per share (EPS) stood at 7.65 sen versus 12.16 sen reported for the corresponding six-month period of last year.

The lower profit in this period was mainly attributable to weaker profits from the Group’s associates, especially OM Materials (Sarawak) Sdn Bhd. Furthermore, CMSB’s Cement and Construction & Road Maintenance Divisions also recorded lower profits during this period although, collectively, the Group’s traditional core businesses, which also includes the Construction Materials & Trading and Property Development Divisions, have done better. It reported a collective PBT of RM126.57 million in 1H 2019, an improvement by 7%, in comparison to 1H 2018’s PBT of RM118.66 million.

The Group’s Cement Division reported a 19% lower PBT of RM31.67 million in 1H 2019 compared to 1H 2018’s PBT of RM39.19 million, despite 8% improvement in its revenue. The lower PBT was attributable to the higher cost of imported clinker, which has increased due to the spike in global demand driven by the reduction of clinker production in China and strong regional demand especially from Bangladesh and the Philippines. The cost of coal has also increased in this period, by as much as 17%, and impacted the Division’s profit margin.

The Construction Materials & Trading Division registered a strong PBT of RM39.96 million, an increase of 71% in comparison to 1H 2018’s PBT of RM23.41 million. The higher PBT is mainly attributable to the 27% higher revenue, 1% higher gross profit margin and a reversal of provision of RM9 million.  Even without the reversal of provision, the Division’s PBT of RM30.96 million for 1H 2019 would have been 32% stronger than the corresponding six-month period of last year.

The Construction & Road Maintenance Division reported a PBT of RM34 million for 1H 2019, 24% lower than 1H 2018’s PBT of RM44.76 million. This was due to the Division’s lower year-on-year revenue by 9%, mainly due to lower construction revenue resulting from completion of works and the expiry of the Federal road maintenance contract on 31 August 2018. Furthermore, the Division also reported 4% lower gross profit margin as there was a one-off item in 1H 2018, in the form of arrears received, amounting to RM3.51 million.

The Group’s Property Development Division reported a strong PBT of RM20.95 million for 1H 2019 compared to RM11.30 million reported for the corresponding period in 2018. This is mainly attributable to the profit recognition from a land sale, higher number of condominium and apartments units sold as well as higher rental income from unsold apartments.

From its associates, the Group recorded a share of profit of RM25.71 million in 1H 2019, lower by 66% than 1H 2018’s profit of RM74.88 million. This was mainly due to the lower contribution by OM Materials (Sarawak) Sdn Bhd, CMSB’s 25%-owned associate company, which contributed RM5.31 million in 1H 2019 to the Group. This contribution was lower by 89% in comparison to 1H 2018 as the Company had then posted a stellar share of profit of RM48.48 million. The lower profit was due to the recent weak commodity prices and the ongoing global trade-war which has been impacting the entire industry.

Commenting on the results, CMSB’s Group Chief Executive Officer – Corporate, Dato Isaac Lugun, said: “The result for the first half of 2019 has mostly been impacted by the performance of our associate company OM Materials (Sarawak). Although OM Material (Sarawak)’s prospects in the immediate-term are challenging mainly due to the macro-economic factors, the Group remains confident on its longer-term prospects due to its position in the first quartile of the global production cost curve, coming mostly from the competitive power price offered in Sarawak, and its strong global presence. Once the market rebounds, we believe that OM Materials (Sarawak) will again post a similar stellar financial performance it did in 2018. The Group also remains positive on its other associate companies including Sacofa Sdn Bhd, Kenanga Investment Bank Berhad and KKB Engineering Berhad, which are part of our growth strategy for our strategic investments to drive the next wave of growth. The aim of this growth strategy is for our traditional core businesses and our strategic investments to counter-balance each other and in the long-term to equally contribute to double the Group’s earnings.”

On our traditional core businesses, we expect their growth to continue and be driven by the ongoing Pan Borneo Highway project and the State government’s increased spending on infrastructure. As seen in the State’s record budget for 2019, RM9.07 billion is spent on development which in part will fund the implementation of major infrastructure projects including the Coastal Road and Second Link Road, tenders for which have started being awarded, the Water Grid and Electricity projects and the State government’s push for rural development. This ensures that the State will be a pocket of increased construction activity for the next few years and this is expected have a positive impact on our traditional core businesses as they are involved heavily in the supply of construction materials.”

“CMSB will continue to maintain its strong growth potential and will remain resilient in spite of certain headwinds we foresee and are ready for. The Group is well positioned to benefit in all key economic drivers in Sarawak and is supported by its healthy balance sheet and its three-pronged growth strategy. Specifically, this strategy calls for CMSB to: firstly, reposition and fortify all traditional core businesses, secondly, to fully implement and grow the strategic businesses and, lastly, to reposition and strengthen the CMS brand.” added Dato Isaac Lugun.

“Continually aiming to post good and strong profits while staying true to our business ethics, transparency and dedication to compliance, Cahya Mata Sarawak Berhad, is well on its way to becoming ‘Sarawak’s Most Admired Company’.” concluded Dato Isaac Lugun.

Cheque presentation ceremony to charitable organisations_media

CMS Tribal Run Becomes Anticipated Annual Event in the Sarawak Calendar

Kuching (Sarawak), 5 August 2019 – First organised in 2015 as a way for CMS employees to raise donations for community-based charities and also to promote healthier living, the CMS Tribal Run has grown in strength, year-on-year.

This year, the CMS Tribal Run exceeded our expectations with over 3,200 participants in just Kuching alone. In fact, this year’s edition of the CMS Tribal Run, was extended to Miri in addition to Kuching!

Runners turned up bright and early, energized and showing their jovial spirit with a great number dressed in their traditional regalia, adding even more vibrancy and colour to the fun-filled activity.

The CMS Tribal Run in Miri was flagged-off at the Marina Park earlier in July 2019, with a 5km Fun Run/Walk attracting some 500 eager and enthusiastic runners.

The second flag-off took place on 4 August 2019 at Wisma Mahmud, Kuching, which started with a 10km Competitive Race followed by a 5km Fun Run and last but not least the 3km Family Run/Walk. In addition to the race itself, there were also prizes for “Best Tribal Wear” which saw throngs of participants adorned in their stunning tribal regalia.

Staying true to the tagline “CMS Cares! 100% Goes to Charity”, all of the registration fees collected amounting to an astonishing RM154,800 was donated evenly among 12 charitable bodies; three of which are from Miri, i.e. Parents Association of The Special Children Miri (PIBAKIS), Malaysia Red Crescent Miri Chapter’s Dialysis Centre and The Ten Ringgit Club, whereas the remaining nine are from Kuching, ie. Persatuan Prihatin Ibu Tunggal Bahagian Kuching (CARE Kuching), Home of Peace, Mental Health Association of Sarawak, Dyslexia Association of Sarawak, Sarawak Turf & Equestrian Club (STEC) Kidney Foundation, Persatuan Dialisis Cahaya Kuching, Sarawak Children Cancer Society, Sarawak Society for the Deaf and the Sarawak Society for the Prevention of Cruelty (SSPCA).

Over and above that, Cahya Runners consisting of CMS top runners went the extra mile in its name and raised a whopping RM13,012 for the Society for Critically Sick Children (SOS Kids) and CMS matched that figure for Persatuan Kebajikan Kanak-Kanak Terencat Akal, Sarawak (PERKATA).

Group CEO – Corporate, Dato Isaac Lugun, said; “I am delighted to see the growing number of people who participate in our CMS Tribal Run every year. As I said some time ago, CMS Tribal Run is among the few, if not the only run in Sarawak where its entire registration fees are donated to charities and local communities. Not only do we as a company, encourage a more proactive and healthier lifestyle among Sarawakians, we are also able to give financial assistance to charities who service our underprivileged communities.”

This year’s CMS Tribal Run received tremendous support from Satria Realty, Revive, Moma, Milo and Indocafe. We also saw the same enthusiasm among the participants from the likes of Titanium Project Management, JKR (Sarawak), K&N Kenanga Investment Bank Bhd, RHB Bank, Borneo Convention Centre Kuching, Ernst & Young, Kuching Toastmasters Club, Sarawak Economic Development Corp, Nova Fusion, KKB Engineering, Kuching Water Board, SACOFA, Sara Resorts, Satria Realty, SCIB Concrete Manufacturing, Yung Kong Co. Berhad, Sarawak Energy Bhd and Hock Seng Lee.

CMS Receives Silver And Bronze At International ARA 2019_media

CMS Receives Silver and Bronze at 2019 Australasia Reporting Awards

Kuching (Sarawak), Friday, 28 June 2019 – Cahya Mata Sarawak (CMS) recently received silver for their distinguished achievement in Sustainability Reporting and bronze for Annual Reporting at the 2019 Annual Australasian Reporting Awards (ARA) held in Melbourne, Australia. These reports were benchmarked against ARA criteria which are based on world best practice.

Speaking about the awards, Dato Isaac Lugun, Group Chief Executive Officer – Corporate said, “We are delighted to know that the quality of both our sustainability and annual reports stand on par with world best practice.”

“We take great pride in our Annual and Sustainability Reports as we believe it is one of the best ways to communicate with our stakeholders.  The reports demonstrate our commitment to good governance, transparency, compliance and ethics. Recognition like these are what makes CMS an admired company.”

The ARA was first founded in the 1950s by a group of business leaders who were keen to establish awards for excellence in preparing annual reports, constantly improving the standards of financial reporting and communicating with stakeholders. These awards are now known as the ARA and the recipient criteria entails an open willing attitude, attention to detail and accuracy, a sensitivity and responsiveness to stakeholders, a willingness to put in the effort to communicate effectively and a commitment to achieving and improving upon standards.

These awards are in addition to other similar recognitions achieved by CMS in Malaysia. CMS is the only Sarawak public-listed company and one out of 56 companies in Malaysia to be made a constituent of the FTSE4Good Bursa Malaysia Index, a testament to its strong sustainability practice. For its good track record of corporate disclosure, the Group has also qualified for Bursa Malaysia’s Green Lane Policy.

CMS Cement Pending plant

Cement Prices to Normalise Post Pen. Malaysia Cement Price Wars

Kuching (Sarawak), Sunday, 23 June 2019 – Cahya Mata Sarawak Berhad (CMSB – 2852) CMS Cement Industries Sdn Bhd (CMSCI), swiftly moved to welcome the request by YB Lim Guan Eng, Finance Minister of Malaysia to probe the difference in cement prices between East Malaysia and West Malaysia.

En. Suhadi Sulaiman, CEO of CMSCI said, “We welcome the enquiry for two reasons. Firstly, it will show that the disparity in prices is purely due to the recent aggressive price war which led to industry mergers and acquisitions in Pen. Malaysia. Secondly, an enquiry of this nature will also serve-to-show once and for all that Sarawak is not and never has been a cement monopoly. Other industry players are welcome to set-up-shop but choose not to venture into Sarawak because the initial start-up costs for development of infrastructure and haulage make it non-viable. CMSCI has been able to offset and spread these operations costs year-in-year-out by being in operation for over 40 years.”

“CMSCI will cooperate openly and transparently with any enquiry because any enquiry will show that we operate at the highest levels of business and retail integrity. The enquiry will also show that CMSCI has not raised our prices since January 2016.” We reaffirm as per our statement last week, CMSCI has no plans to increase our prices any time soon.”

Top 10 Employers of Choice 2019 Cert

Cahya Mata Sarawak Admired By Sarawakian Workforce as Among the Top 4 Preferred Employers

Kuching (Sarawak), Thursday, 13 June 2019 – JobStreet recently conducted a survey of over 1,000 Sarawakian jobseekers to find out the desirable companies to work for in 2019. The survey highlighted that Sarawakian jobseekers are interested in career development, fair compensation, company reputation and values the most. These are the same key pillars that Cahya Mata Sarawak (CMS) strives for, in their journey towards being Sarawak’s most admired company.

One of the biggest selling points in recruitment is career pathing and this is clearly evident in CMS’ ‘Management Trainee Development Programme’ where candidates are given an opportunity to rotate in different departments to gain insight and appreciation of the various job functions within the company. The second thing candidates look out for is a company that cares for the community in which it operates, something that CMS has been doing for many years. Employees at CMS have contributed 363,926 hours in the last 12 years through their ‘Doing Good’ initiatives, lending a hand and improving the lives of communities throughout Sarawak. Recently, CMS launched its new community page where nominations for communities in need of help can be submitted to the ‘Doing Good’ team for consideration under their ‘Building Sustainable Communities’ initiative.

Talking about JobStreet’s ‘Top 10 Employers of Choice’ survey, CMSB’s Head of Corporate Reputation & Communications, Jason Lee said, “I’m delighted to hear we are in the top 4 on the survey. Having a 13-year long career in CMS myself, shows that I believe in the values that CMS upholds and the number of long service awards we give out is staggering. We are given career development opportunities while being in an environment that makes you feel like you are a part of a family. Such a feeling motivates everyone to bring out their personal best which is integral in the company’s growth so we can remain on track in helping Sarawak achieving a ‘Developed State’ status by 2030.”