Stay abreast with the latest happenings in Cahya Mata Sarawak Berhad (CMS).

CMS Employee Tests Negative for Covid-19

Company continues to undertake stringent SOPs across all operations

Kuching (Sarawak), Tuesday, 14 July 2020 – Cahya Mata Sarawak Berhad (CMS) today reported that its employee who was a Person Under Investigation (PUI) connected to the new “Kuching Engineering Cluster” has tested negative for Covid-19. As a result, CMS headquarters at Wisma Mahmud, Kuching will reopen for business in strict compliance with existing standard operating procedures (SOPs) with effect from Wednesday, 15 July 2020.

Commenting on the matter was CMS Group Managing Director, Dato Isaac Lugun who said, “I wish to reiterate that there is no COVID-19 case within the CMS Group and we urge everyone within the Group and the general public to remain calm. We confirm that we have been adhering strictly to all COVID-19 SOPs and guidelines right from the onset of the Movement Control Order across the entire CMS Group.”

“Moving forward, we will continue to strictly comply with all SOPs and guidelines. This includes having only 50% of our workforce at our premises on any certain day as well as conducting daily temperature checks and making health declarations. We will also continue to ensure mandatory mask wearing and social distancing while no outside visitors will be allowed on our office premises, among our other SOPs.”

“We would like to reaffirm that the health and well-being of all our employees and members of the public are our utmost priority and that we will continue to be vigilant in our efforts to help contain the spread of COVID-19. CMS is committed to upholding an honest and transparent work culture and we will continue to remain open in all our dealings with all our stakeholders,” added Dato Isaac.

CMS Posts Lower Q1 Results but is On Track to Regain Business Momentum

Posts Q1 revenue of RM282.45 million and PBT of RM26.81 million

Kuching (Sarawak), Tuesday, 30 June 2020 – Cahya Mata Sarawak Berhad (CMS or the Group) today reported that although its financial performance for the first quarter ended 31 March 2020 (1Q 2020) had dipped, it is taking proactive actions to regain business momentum amidst the Recovery Movement Control Order (RMCO) phase.

For 1Q 2020, the Group posted total revenue of RM282.45 million and a pre-tax profit (PBT) of RM26.81 million – a 32% and 57% dip in revenue and PBT respectively in comparison to 1Q 2019’s revenue of RM418.18 million and PBT of RM62.44 million. The softer performance in 1Q 2020 stemmed from lower revenue contributions by all its Divisions. With the exception of CMS’ Cement Division, all other traditional core businesses reported lower PBT margins. Contribution from associates too decreased by 15% to RM11.39 million from 1Q 2019’s contribution of RM13.35 million.

Commenting on the Group’s Q1 2020 performance, CMS Group Managing Director, Dato Isaac Lugun said: “While CMS’ quarterly results were impacted by external headwinds, including the Movement Control Order (MCO) towards the latter part of the first quarter, we managed to maintain our profitability although at a lower level. Profits for all our businesses shrank with the exception of the Cement Division which posted a 69% improvement in PBT on the back of enhanced operational efficiencies and reduced costs.”

“Like most other businesses whose operations were affected by the sudden but necessary MCO restrictions, we expect our Q2 2020 results too to be adversely impacted. We anticipate that we will only begin making real headway again over the second half of 2020. Nevertheless, following the reopening of our operations across the Group, we are now laser-focused on implementing catch-up strategies to ensure our financial resilience.”

“Our efforts include enhancing operational efficiencies to attain cost savings and strengthening cost control measures including rationalising our capital expenditure (capex). As such, non-essential capex has been minimised, while essential capex will be implemented in stages. On top of this, we continue to preserve cash for business operations and future investment.”

The CMS Group achieved the following results over the first quarter ended 31 March 2020:

The Cement Division’s 1Q 2020 revenue declined by 18% to RM120.25 million as compared to RM146.39 million in 1Q 2019. However, its PBT improved 69% to RM18.59 million as compared to RM11.00 million previously. The improvement in profitability was mainly driven by higher usage of its clinker facilities, lower repair and maintenance costs, as well as cheaper imported clinker. Moving forward, the Division will focus on strengthening operational efficiency by improving its clinker plant production. It is well positioned to capitalise on opportunities related to the expected spike in major infrastructure projects in Sarawak.

The Construction Materials & Trading Division’s 1Q 2020 revenue declined by 31% to RM77.91 million while its PBT contracted by 68% to RM6.72 million. This Division recorded lower revenue from its quarry, premix and trading sectors. The drop in PBT against 1Q 2019 was also partially attributable to a one-off provision reversal amounting to RM9.0 million in 1Q 2019. Given the Division’s involvement in the execution of various infrastructure projects throughout Sarawak, it will be one of the key contributors to the Group’s profitability in 2020.

The Construction & Road Maintenance Division’s 1Q 2020 revenue decreased by 37% to RM81.25 million as compared to RM129.75 million in 1Q 2019. Road maintenance revenue for 1Q 2020 decreased as the road length maintained effective 1 January 2020 was almost half of that maintained previously.  The Division’s road maintenance gross profit margin was also impacted due to the including of more scope under the new road maintenance contract whilst the contract value has remained the same. Meanwhile, the lower revenue from construction works was mainly due to less work performed. The Division’s PBT declined by 60% to RM6.06 million in 1Q 2020 from RM15.33 million in 1Q 2019. The Division’s mid-term prospects are well supported by its order book of some RM1.23 billion.

The Property Development Divisions 1Q 2020 revenue declined by 59% to RM18.34 million in comparison to RM44.55 million in 1Q 2019. This was mainly due to the drop in the number of properties sold. This Division recognised revenue of RM4.4 million from land sale versus RM12.25 million in 1Q 2019. Consequently, its PBT dropped by 71% year-on-year to RM4.38 million in 1Q 2020.

In terms of its Strategic Investments, the Group recorded share of profits from its associates of RM11.39 million in 1Q 2020. This was lower by 15% as compared to the RM13.35 million garnered in 1Q 2019. The lower contribution from associates was mainly due to losses incurred by Kenanga Investment Bank in the first quarter.

Dato Isaac also went on to say, “The current pandemic has brought about significant disruption and uncertainty to businesses and economies globally. CMS’ Management has stepped up its efforts to navigate the turbulence with grit and persistence to ensure that our operations regain the positive momentum that we initially had. We remain focused on growing our portfolio of businesses by taking advantage of three major growth areas within Sarawak. These include opportunities in the area of energy-intensive businesses within the Sarawak Corridor of Renewable Energy (SCORE), the unprecedented spike in infrastructure development within the state, and telecommunications infrastructure development under Sarawak’s Digital Economy initiative.

Commenting on CMS’ strategy moving forward, Dato Isaac said: “CMS will continue to bring into play a three-pronged strategy which will see our team working to reposition and fortify our traditional core businesses; fully implement and grow our strategic businesses; and reposition and strengthen the CMS brand. With our increasingly strong business fundamentals, coupled with other measures taken by Management to position the Group for long-term sustainable revenue and profitability growth, barring unforeseen circumstances, we are cautiously optimistic that we will be able to deliver a satisfactory performance in 2020.”

CMS among Five Finalist for “Report of the Year” at Australasian Reporting Awards 2020

CMS is also First ASEAN Finalist in the 70-Year History of the ARA

Kuching (Sarawak), Thursday, 25 June 2020 – Cahya Mata Sarawak (CMS) was recently named one of five finalists for the “Report of the Year Award” at the prestigious 2020 Australasian Reporting Awards (ARA) event. CMS was also a recipient of an ARA Gold Award for distinguished reporting which enabled it to qualify as a finalist for the Report of the Year Award. CMS’ inaugural Integrated Report 2018 also had the added distinction of being the first ever report from a company within ASEAN to be selected as a finalist in the 70-year history of the ARA.

The winners of the 2020 ARA were announced yesterday over a virtual awards presentation event broadcast from Melbourne, Australia. Introduced in the 1950s, the annual ARA event celebrates private sector, public sector and not-for-profit organisations from Australia, New Zealand and throughout the Asia-Pacific region that uphold world class reporting standards.

The ARA Report of the Year Award is presented to the most outstanding annual report entered in the Awards. The finalists for this award are selected from among those reports that have received a distinguished Gold Award and are subject to further rigorous review by the ARA Awards Committee. All reports are benchmarked against stringent ARA criteria which are based on world best practice standards. CMS was one among 69 participants who won a Gold Award at the 2020 ARA event and the only Malaysian organisation to make the list of finalists. Two of the other four finalists hailed from Australia and the other two from New Zealand.

Commenting on CMS’ achievement was Group Managing Director, Dato Isaac Lugun who had this to say: “We are both humbled and elated to know that the quality of our maiden Integrated Report stands on par with other distinguished reports that uphold world best practices. This achievement underscores our commitment to excellence and to raising the standards of our reporting and disclosure.”

“Being a passionate, people-led organisation, CMS makes every effort to exceed the expectations of our discerning stakeholders and uphold the responsibilities we are entrusted with. We have endeavoured to approach our business in ways that truly preserve and create stakeholder value. I am pleased to say that CMS has been doing just that by remaining agile amidst an increasingly challenging playing field, as well as by rolling out relevant and focused business strategies.”

“Our move towards integrated reporting serves to capture in a more formal and transparent manner, the way in which CMS has been aligning strategy with value creation and performance. This has been happening for some time now across the Group and the resources that we utilise. By formally demonstrating how we are creating real value for our stakeholders over the short, medium and long-terms, we aim to strengthen stakeholder confidence and bolster our position as a preferred company on Bursa Malaysia.”

Dato Isaac went on to say, “We are honoured to be counted among the five finalists that hailed from diverse geographies and industry sectors. We also take pride in the fact that CMS was the only Malaysian entity (and a Sarawakian company at that) to be counted among the five finalists. We also have the double honour of knowing that we are the first organisation within ASEAN to have been nominated as a finalist since ARA’s inception some 70 years ago.”

According to the ARA Awards Committee, all five finalists achieved a very high standard in annual reporting with each finalist found to have committed to providing a report that responded to stakeholders’ needs with disclosures that were honest, open and genuine. In a world where trust in large corporations and government agencies is diminishing, the tenets of integrity, transparency and balanced reporting are the keys to rebuilding that trust. All of the finalists distinguished themselves in these areas and the overall standard was so high that judges had a very difficult task in selecting a winner.

Established in 1950 by a group of business leaders who were keen to establish awards for excellence in preparing annual reports, the ARA aims to constantly improve the standards of financial reporting and communication with stakeholders. The criteria for the ARA include an open and proactive stance towards communication, attention to detail and accuracy, a sensitivity and responsiveness to stakeholders, a willingness to put in the effort to communicate effectively, as well as a commitment to achieving and enhancing standards.

CMS Highlights Actions to Regain Business Momentum Following Sarawak’s First Virtual AGM

Kuching (Sarawak), Sunday, 21 June 2020 – Following the conclusion of its virtual 45th Annual General Meeting (AGM), Cahya Mata Sarawak Berhad (CMS or the Group) has come to the fore to reaffirm the proactive actions it is taking to regain business momentum amidst the Recovery Movement Control Order (RMCO) phase.

On 18 June 2020, CMS concluded the first ever online AGM to be held by a Sarawakian public-listed company. This year, the Company out of concern for the well-being and safety of its shareholders and in compliance with MCO regulations, conducted its 45th AGM via live webcast as well as Remote Participation and Voting (RPV) facilities.

The live webcast was broadcast from the auditorium at Menara Symphony in Petaling Jaya with only a handful of CMS’ key senior management in attendance. Meanwhile shareholders participated remotely from the comfort of their smart devices or personal computer/notebooks. During the AGM proceedings, shareholders were able to ask questions in the chat box and submit their votes in real-time. To ensure the AGM proceeded smoothly, CMS allowed proxy forms to be lodged electronically via the Boardroom Smart Investor Portal while voting was conducted by way of RVP electronic polling. An independent poll administrator was appointed to scrutinise, verify and validate the poll results. The AGM saw all the 11 ordinary resolutions that were tabled duly approved by CMS’ shareholders.

Commenting on the recently concluded AGM, CMS Group Managing Director, Dato Isaac Lugun had this to say: “Even as the Covid-19 pandemic has seen the onset of whole new set of challenges for all of us, we are pleased to return to some semblance of normality by being able to conclude this AGM  in a virtual manner. We are also pleased to report that despite the initial challenges of the MCO, we were still able to publish our Integrated Annual Report and Sustainability Report for 2019. Carrying the common theme “Creating Future Value”, both these reports are available for download from CMS’ corporate website at www.cmsb.my.”

Dato Isaac went on to say, “While this unprecedented crisis has taken a toll on our nation, economy and people, we are glad to see many parties proactively working together to mitigate the effect of the pandemic and challenging but necessary MCO. As the leading listed corporation in the State of Sarawak, CMS on its part has sought to protect our business and stakeholders while preserving value in several ways.”

“Firstly, we have sought to prioritise employee safety and health by adopting protective measures and working practices to ensure workplace health and safety. Employee welfare too has been prioritised with full remuneration delivered on schedule. We have also sought to ensure the welfare of our suppliers and contractors and made a special effort to settle all outstanding invoices in a speedy manner to help alleviate any financial challenges that they may be facing.”

“To preserve shareholder value, our team was busy devising response plans and protocols during the lockdown. This gave us the means to swiftly re-commence operations in mid-May during the Conditional MCO period. Today, we continue to focus on ensuring sustainable long-term growth and upholding good shareholder returns.”

“To ensure our financial resilience, we are now laser-focused on implementing catch-up strategies following the reopening of our operations across the board. We continue to enhance operational efficiencies to attain cost savings and enhance cost control measures including rationalising our capital expenditure (capex). As such, non-essential capex has been minimised, while essential capex will be implemented in stages. On top of this, we continue to preserve cash for business operations and future investment.”

Dato Isaac also highlighted that CMS is back on its feet and primed to capture opportunities in three major growth areas within Sarawak. “Opportunities abound within the Sarawak Corridor of Renewable Energy (SCORE) and CMS’ associate company, OM Materials (Sarawak) Sdn Bhd, and subsidiary, Malaysian Phosphate Additives (Sarawak) Sdn Bhd, are well positioned to capitalise on the energy-intensive industries they are engaged in within SCORE.”

“On top of this, there are ample opportunities to be tapped via the unprecedented spike in infrastructure development in Sarawak. To this end, the Group’s Cement, Construction Materials & Trading, as well as Construction & Road Maintenance Divisions are ramping up their operations to cater to market needs. Finally, as Sarawak wholeheartedly embraces the Digital Economy, CMS is ready to play a leading role in telecommunications infrastructure development activities through our strategic stake in telco player, SACOFA Sdn Bhd.”

Dato Isaac also commented on CMS’ strategy moving forward: “CMS will continue to bring into play a three-pronged strategy which will see our team working to reposition and fortify our traditional core businesses; fully implement and grow our strategic businesses; and reposition and strengthen the CMS brand.”

“Barring unforeseen circumstances, our ambition of achieving an annual PATNCI of RM500 million within five years and realising our softer target of becoming the most admired Sarawak public-listed company are still very realistic targets to us. Despite the challenges besetting our economy and many companies, we are confident of getting back on track to regain whatever momentum we have lost,” concluded Dato Isaac.

CMS Reassures Market of Sufficient Cement Supply

Kuching (Sarawak), Sunday, 17 May 2020 – Following a recent outcry by some contractors that an inadequate supply of cement is hindering them from recommencing construction activities, Cahya Mata Sarawak Berhad (CMS or the Group) is stepping forward to reassure the market that there will be a sufficient supply of cement effective Monday, 18 May 2020.

In response to concerns by certain parties, CMS Group Managing Director, Dato Isaac Lugun had this to say: “We would like to reassure all construction players that an adequate supply of cement is being prepared for distribution to the market effective tomorrow and not after Gawai as inferred by some. In fact, as of 15 May 2020, the operation of the Group’s wholly owned subsidiary, CMS Cement Industries Sdn Bhd (CMS Cement or the Company) in Sibu was up and running in full compliance with all standard operating procedures (SOPs) outlined by the relevant authorities.”

“All the Company’s other cement production and distribution facilities are being prepared in full compliance with the stringent SOPS set and we anticipate that all our cement manufacturing operations throughout Sarawak will be in full swing by tomorrow. Barring unforeseen circumstances, this essentially means that the supply of cement will be made available to local businesses throughout Sarawak effective Monday, 18 May 2020 and not later as implied.”

Dato Isaac also went on to say, “The CMS Group realises its responsibility to provide an uninterrupted supply of cement to the state of Sarawak. In line with this, our business continuity plan mandates that we always have a minimum reserve stock of cement in our silos. Given that construction activities were not allowed during the Movement Control Order, this stock remains untouched and we are ready to meet the demand for cement once our operations commence.”

The CMS Group does not foresee any supply issues moving forward. Currently CMS Cement operates using a system of authorised dealers where it has over 25 dealers servicing its customers throughout the state. These dealers actually began taking orders from customers earlier last week. CMS Cement advises its customers to place their orders through their respective dealers and to ensure that their dealers in turn place their purchase orders accurately and in a timely manner with the nearest CMS Cement sales office.

The CMS Group operates production and distribution facilities in every major town within Sarawak. These include two plants in Kuching (the Mambong Integrated Plant and the Pending Grinding Plant), one plant in Bintulu (the Bintulu Grinding Plant), as well as bulk terminals in Sibu and Miri.

“Through our strategically located plants and terminals (all of which are outfitted with packing and bulk distribution capabilities), the market can rest assured that all of Sarawak’s main centres of economic activity, namely Kuching, Sibu, Bintulu, Miri, as well as the emerging markets of Samalaju, Mukah, Lawas and their hinterlands, will have a stable and sufficient supply of quality bag and bulk cement to meet their needs effective 18 May 2020”, added Dato Isaac.

CMS Cement produces the CEM 1 42.5N and 32.5N grades of cement. Through these products, it provides its customers a range of cement product types that meet general and specific project requirements at different price points. A third product, the premium grade 52.5N grade (MS EN 197-1 standard) Portland Cement, is produced for export purposes and to meet the needs of projects that have a specific need for a higher-grade cement.