MISC, Dialog ink deal with China Aviation to build RM371m oil storage facility

KUALA LUMPUR: MISC BHD [] and DIALOG GROUP BHD [] via their joint venture company (JVC), Centralised Terminals Sdn Bhd (CTSB), have signed an agreement with China Aviation Oil (Singapore) Corporation Ltd (CAO) to jointly build and maintain an oil storage tank terminal facility within Tanjung Langsat Port, Johor.

MISC in a filing to Bursa Malaysia Securities on Thursday, Oct 6 said the project was expected to commence by early 2012 and be completed by the end of 2013, with a total development cost of an estimated RM371 million.

The petroleum products storage tank terminal f facility would have a storage capacity of 380,000 cubic metres (cbm), it said.

CTSB is 45% owned by MISC and 55% held by Dialog.

Under a shareholders' agreement between CTSB and CAO, the companies would establish a JVC known as Langsat Terminal (Three) Sdn Bhd, in which CTSB would hold a 74% equity stake and the balance 26% to be held by CAO.

CAO is the largest physical jet fuel trader in the Asia Pacific region.

CAO will also enter into a terminal usage agreement with Langsat Terminal Three for the lease of all the capacity of the tankages and related facilities for an initial term of seven years.

MISC said CTSB would finance its portion (including the initial share subscription) of the eventual equity in the facility via internally generated funds, bank borrowings, proceeds from increase in its share capital and/or advances from its shareholders, of which the breakdown was pending finalisation.

'The shareholders agreement will pave the way for MISC and CAO to be strategic business partners in the equity ownership and development of the project.

'The project is expected to enhance MISC's position in the tank terminal business,' it said.

MISC said CTSB's proposed investments in Langsat Terminal Three ''were expected to contribute positively to its long term future earnings.

Presently, MISC and Dialog, through CTSB operates a tank terminal facility in Tanjung Langsat with a capacity of 476,000 cbm, under Langsat Terminal (One) Sdn Bhd.

Development of an additional 171,000 cbm facility at the adjacent Langsat Terminal (Two) is currently underway and is scheduled for completion by end 2011.

CIMB Research: Dialog remains Outperform, TP RM3.27

KUALA LUMPUR: CIMB Equities Research keeps DIALOG GROUP BHD [] an Outperform with the potential share price catalysts being an announcement of marginal field development, and new markets including Saudi Arabia.

The research house said on Monday, May 16 Dialog's CONSTRUCTION [] of the RM5bn independent deepwater petroleum terminal in Pengerang, south Johor is set to start in mid-CY11 as scheduled.

'Having received approval from the Department of Environment (DOE) last month, the company inked on Friday a JV that marks the start of land reclamation works. We expect the construction portion to start contributing in 1QFY6/12.

'We maintain our forecasts and SOP-based target price of RM3.27,' it said.

Dialog gets Johor nod to reclaim, use Pengarang land for RM5b terminal

KUALA LUMPUR: DIALOG GROUP BHD [] has received the Johor government's approval to reclaim and use the site in Pengarang for the proposed RM5 billion independent deepwater petroleum terminal.

Dialog said on Friday, May 13 its unit Dialog Pengerang Sdn Bhd (DPgSB) had signed a development cum joint venture agreement (DJVA) with the Johor government and the State Secretary, Johor (Inc).

'The DJVA grants the right to start the reclamation work and the use of the reclaimed land for the CONSTRUCTION [] of the independent deepwater petroleum terminal.

'The independent deepwater petroleum terminal will serve as a springboard for other industries to be developed and in line with that the Johor State Government will expand its Master Plan to develop Southeast Johor into a regional oil and gas hub,' said Dialog.

Dialog said the terminal will be developed on contiguous onshore and seabed land located between Tanjung Ayam and Tanjung Kapal, Pengerang, with harbour port, jetty and other marine facilities with water depth up to 26 meters.

It added the terminal would be capable to handling ultra large crude carriers and very large crude carriers and other vessels, and with tankage facilities for the handling, storage, processing and distribution of crude oil, petroleum, petrochemicals and chemical products in Tanjung Ayam and Tanjung Kapal, Pengerang.

Dialog said the combined investment in the project is estimated at RM5 billion over a seven-year period.

The Project is an Entry Point Project under the Malaysian government's National Key Economic Areas and part of the Economic Transformation Programme.

#Stocks to watch:* Dialog, Maybank, Fitters, Media Prima

KUALA LUMPUR: Stocks which could see strong trading interest on Friday, May 13 include DIALOG GROUP BHD [], MALAYAN BANKING BHD [], FITTERS DIVERSIFIED BHD [] and MEDIA PRIMA BHD [].

Petroliam Nasional Bhd is reported to be investing up to RM50 billion in new integrated downstream project to expand its business and further spur the growth of Malaysia's oil and gas downstream sector. This will be the single largest investment in the country in a project.

The signing ceremony will be on Friday in the presence of Prime Minister Datuk Seri Najib Tun Razak.

Then project would likely be the independent deepwater petroleum terminal project at Pengerang, Johor which is jointly undertaken by Dialog and Vopak.

To recap, Dialog and Vopak's combined investment in the terminal would be RM5 billion and over a seven year period. Dialog's investment would be RM2.5b of which 30% would be from equity and 70% from project financing.

Dialog and Vopak are the core facilitators for the project, which is viewed as an entry point project (EPP) under the government's Economic Transformation Policy (ETP).

Maybank expects earnings for FY11 ending June 30 to surpass the record net profit it achieved in FY10.

Maybank's net profit for 3QFY11 rose 11%''to RM1.14 billion from RM1.03 billion. Revenue for the three months in review was 11.8% higher at RM5.13 billion compared with RM4.6 billion a year ago.

Fitters' earnings rose 107% to RM5.73 million from RM2.56 million a year ago, boosted by its new palm oil extraction business. Revenue was RM102.74 million, up 193% from RM35.03 million. Earnings per share were 2.65 sen versus 1.29 sen.

Media Prima's net profit for the first quarter ended March 31, 2011 fell 23.7% to RM34.79 million from RM45.57 million a year ago, in line with general seasonal advertising trends.

Revenue for the quarter rose to RM354.19 million from RM323.67 million in 2010. Earnings per share werea 3.36 sen while net assets per share was RM1.27.

Reviewing its performance, Media Prima said on Thursday, May 12 that the first quarter of the year had always been the lowest in terms of advertising spending as compared to other quarters, when most advertisers start their promotional roll out.

#Stocks to watch:* Banks, oil and gas, Shell, Dialog, Hartalega, HL Bank

KUALA LUMPUR: Stocks which could attract trading interest on Wednesday, May 11 following fresh corporate news and developments include banks, oil and gas counters, HARTALEGA HOLDINGS BHD [], Shell Refining Company (Federation of Malaya) Bhd and DIALOG GROUP BHD [].

Maybank is raising its deposit and base lending rates effective Wednesday. Its deposit rates will be revised upwards by up to 30 basis points, while its base lending rate (BLR) will be increased by 30 basis points from 6.30% per annum to 6.60% per annum.

RHB Bank Bhd is also raising the BLR from 6.30% per annum to 6.60% per annum, effective Wednesday.

Oil and gas related counters will continue to be in focus, with the latest news that Petroliam Nasional Bhd plans to invest about RM50 billion in an integrated downstream oil and gas complex in Pengarang.

Shell Refining posted net profit of RM135.54 million in the first quarter ended March 31, 2011, up 131% from RM58.61 million a year ago. Revenue increased by 29% to RM3.20 billion from RM2.48 billion while earnings per share were 45.18c versus 19.54 sen a year ago. Shell Refining reported after tax stockholding gains of RM153 million for 1Q11.

Dialog and its business partner Roc Oil Company Limited, Australia are presently tendering for upstream oil & gas prospects in Malaysia. Dialog said that they would look into a possible joint venture if the tender was successful.

Meanwhile, Dialog will report its earnings after market close on Wednesday.

Hartalega's net profit for the fourth quarter ended March 31, 2011 rose 12.9% to RM52.39 million from RM46.41 million a year ago, driven by continuous expansion in production capacity, increase in demand, effective cost control and improvement in production processes.

Revenue for the quarter was up 17.8% to RM192.52 million from RM163.39 million. Earnings per share were 14.41 sen while net assets per share was RM1.36.

HONG LEONG BANK BHD [] has proposed to increase the size of the renounceable rights issue by RM1 billion from RM1.6 billion to RM2.6 billion to further strengthen its capital base and for working capital purposes.

HONG LEONG FINANCIAL GROUP BHD [] is providing a RM2.3 billion loan Hong Leong Bank to assist it with its risk weighted capital adequacy ratio (RWCAR).

Dialog rises on possible marginal oilfield jobs

KUALA LUMPUR: DIALOG GROUP BHD [] shares advanced on Tuesday, May 10 after The Edge FinancialDaily reported that the company and its Australian partner Roc Oil were on the verge of bagging the marginal oilfield projects from Petroliam Nasional Bhd (Petronas) for Balai and Bentara fields, located off the coast of Sarawak.

At 9.30am, Dialog was up three sen to RM2.55 with 330.600 shares traded.

CIMB Equities Research has maintained its sum-of-parts target price of RM2.67 for Dialog and also its earnings per share (EPS) forecasts.

It was commenting on the article that suggested that the JV between Dialog and Australia's Roc Oil was set to secure the risk sharing contract (RSC) for the development of the Balai and Bentara marginal fields.

'The RSC would mark new milestones for both companies ' upstream diversification for Dialog and a Malaysian debut for Roc,' it said.

CIMB Research said assuming that 1) Dialog has the minimum 30% stake in the JV, and 2) other terms are similar to those for the Berantai marginal field, Dialog's FY6/12-13 EPS could be boosted by 8-9%.

'The fees from oil production will be realised beyond our forecast period. Dialog remains an OUTPERFORM, with the potential re-rating triggers being 1) announcement of the marginal field development, and 2) new markets, i.e. Saudi Arabia,' it said