Opps...finally you get real. Now we need driver intervention, im not denial that. Just a bus driver job can be fully substituted with automation, be it wheelchair or bus stop getting passengers. Is the future, not cartoon.
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Economic News
- Thread starter FHBH12
- Start date
http://www.thestar.com.my/business/...al-complex-set-to-attract-rm2bil-investments/
Johor industrial complex set to attract RM2bil investments
SEOUL: Johor Corporation (JCorp) is confident of attracting RM2bil worth of investments for its Tanjung Langsat Industrial Complex (TLIC) near Pasir Gudang, Johor by June 2017.
President and chief executive officer Datuk Kamaruzzaman Abu Kassim told reporters during an investment trip to Seoul that negotiations are on going.
He declined to say which countries the companies are from other than they are involved in the palm oil-based and petrochemical downstream activities.
The 1,400ha TLIC is being developed by JCorp subsidiary TPM Technopark Sdn Bhd.
Petrochemical industries will account for 60% of its activities and 80.93ha has been allocated for a palm oil industrial cluster (POIC).
The remaining 40% will be gas production, steel-making, marine and marine-related industries.
Tanjung Langsat industrial estate is located at the Eastern Gate Development Zone - one of the five designated growth zones within Iskandar Malaysia.
The complex has attracted RM5bil worth of investment from Spain’s Acerinox Group, one of the biggest stainless steel manufacturers in the world.
Currently, more than 50 local and multinational companies have located their projects in TLIC.
“We want to attract more downstream activities to our POIC producing palm oil by-products for the international market,” he said.
Kamaruzzaman said this was a logical objective considering Malaysia’s position as the second major producer of crude palm oil in the world after Indonesia.
He hoped that more Korean companies would consider investing in Johor following Korea’s conglomerate Lottee Chemical to increase its current manufacturing facilities by investing an additional RM1.5bil at TILC.
The presence of other Korean companies in our industrial parks testifies to the opportunities offered by Johor, Kamaruzzaman said.
He said Iskandar Malaysia’s proximity with Singapore was an added advantage.
Johor industrial complex set to attract RM2bil investments
SEOUL: Johor Corporation (JCorp) is confident of attracting RM2bil worth of investments for its Tanjung Langsat Industrial Complex (TLIC) near Pasir Gudang, Johor by June 2017.
President and chief executive officer Datuk Kamaruzzaman Abu Kassim told reporters during an investment trip to Seoul that negotiations are on going.
He declined to say which countries the companies are from other than they are involved in the palm oil-based and petrochemical downstream activities.
The 1,400ha TLIC is being developed by JCorp subsidiary TPM Technopark Sdn Bhd.
Petrochemical industries will account for 60% of its activities and 80.93ha has been allocated for a palm oil industrial cluster (POIC).
The remaining 40% will be gas production, steel-making, marine and marine-related industries.
Tanjung Langsat industrial estate is located at the Eastern Gate Development Zone - one of the five designated growth zones within Iskandar Malaysia.
The complex has attracted RM5bil worth of investment from Spain’s Acerinox Group, one of the biggest stainless steel manufacturers in the world.
Currently, more than 50 local and multinational companies have located their projects in TLIC.
“We want to attract more downstream activities to our POIC producing palm oil by-products for the international market,” he said.
Kamaruzzaman said this was a logical objective considering Malaysia’s position as the second major producer of crude palm oil in the world after Indonesia.
He hoped that more Korean companies would consider investing in Johor following Korea’s conglomerate Lottee Chemical to increase its current manufacturing facilities by investing an additional RM1.5bil at TILC.
The presence of other Korean companies in our industrial parks testifies to the opportunities offered by Johor, Kamaruzzaman said.
He said Iskandar Malaysia’s proximity with Singapore was an added advantage.
The Budget 2017 will announced on 21 Oct.
Petronas is now cashless, needs to cut staff, cut opex and capex to stay relevant and even have to take a bank loan for new development.
So, they may not be able to contribute RM16 billions in dividends which had already been reduced from RM26 billions.
It is extremely ironic and contradicting that Petronas on one hand have to cut opex and expex by billions and yet have to contribute billions and now seek billions in bank loans.
So, where the money for Budget will come from?
While property tax had just been revised and Finance Minister II confirmed no increase in GST, some predicted higher tax for cigs, liquor, petrol, road tax, stamp duty.............which one will affect you guys?
Petronas still has a cash coffer of some 112b rm as of last reporting date.
Analysts concerned over Petronas’ ability to pay dividends
Borneopost Wed, Aug 24, 2016
KUCHING: Analysts outline concerns over national oil and gas player Petroliam Nasional Bhd’s (Petronas) dividend payout plan in light of the group’s results for the second quarter of the year (2Q16).
Kenanga Investment Bank Bhd’s research division (Kenanga Research) reckoned that Petronas may need to conserve more cash through higher cost savings or even at the expense of deferring further capital expenditure (capex) if Petronas remains committed to the RM16 billion dividend commitment, given that it has no intention of raising debt at this juncture.
“That said, we would probably see stronger opex-related contracts award such as the Pan Malaysia transportation and installation contracts and subsea IRM for both Peninsular Malaysia and East Malaysia in 2H16,” it said in a report yesterday.
“While flattish oil prices will cap the sectors’ valuation, we advocate investors to be nimble and selective and look out for strong contract flow as firm earnings recovery indicator.”
Hong Leong Investment Bank Bhd (HLIB Research) took comfort from the fact that Petronas’ 1H16 operating cash flow of RM25.6 billion is sufficient to cover for its capex commitments.
However, the group is still required to pay RM16 billion worth of dividends for its shareholders.
“With RM6 billion already paid, the group may opt to draw from its huge cash coffer of RM112 billion as of the last reporting date to fulfil the additional RM10 billion worth of dividend payments – this is still a manageable level for the group given its strong net cash position,” it highlighted.
“However, we opine that this could only be sustained for another foru or five years before its cash balances dwindle to a more worrying position.”
You have mixed up cash flow with cash reserved.
I'm talking about cash flow meant for operation expenditure and capital expenditure.
Because of the lack of cash, Petronas have to cut drastically on both areas and for the first time in its history, retrench staff.
That's the same reason why they are seeking bank loans for the LNG project in Canada instead of drawing from their cash reserves.
The initial dividend contribution to the Budget 2017 was RM27 billion but was negotiated down to RM16 billion also because they cannot draw down from the cash reserve.
The oil giant had acknowledged that it was facing a cash-flow problem due to the prevailing low oil price environment, which necessitated its RM50bil cut in capital expenditure and operating expenditure from this year up until 2020.
http://www.thestar.com.my/business/...ronas-will-continue-to-review-its-strategies/
Cash reserve, together with items like debtors or sales receits is part of cash flow.
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there's operating cash flow and there's free cash flow. cash reserve can be part of free cash flow as a company can always sell or liquidate assets or short term bonds for cash to keep this cash as a reserve. raising cash by selling company bonds or shares can also be a cash stockpile (reserve) strategy. that kind of cash flow is different from positive operating cash flow where earnings from revenue stream offset expenses and tax. in a negative operating cash flow environment cash reserves can be tapped to inject cash into the balance sheet.
Cash reserves just mean cash lah. Petronas does have plenty of cash. Its just that they are draining that cash pile now due to the low oil prices.
But they are probably still in a better cash position than 90% of the Oil & Gas companies due to its strong cash reserves built up over the years.
The formal name for cash flow statement is called Statement of changes in financial position which a company is required to produced together with BS and P&L.
In business accounting, the statement of change in financial position is a financial statement that outlines the sources and uses of funds and explains any changes in cash or working capital.
Wah ........ Even I as an accountant also blur like sotong at the technical explanation. haha.....
1 thing is for certain. Petronas has a v strong cash position and is certainly not cashless or running out of cash.
Also just to add that in this era of low oil prices & low interest rates, it will be financial madness for Petronas to use its cash pile to build Pengerang, instead of via bank loans. Luckily, Bro Snowbird is not running Petronas.
[FONT=&]I believe Petronas's contribute 17% these days to MY annual budget. It used to be at 40%.
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Petroliam Nasional Bhd (Petronas) says it is committed to paying RM16 billion in dividends to the government this year, despite oil prices forecast to remain low in 2016.
Petronas president and group chief executive officer (CEO) Wan Zulkiflee Wan Ariffin said Petronas had persevered through the challenging year to remain profitable and fulfil its dividend commitment to its shareholders.
“We discussed dividend payment with the government and for the government to have a reduction from RM26 billion (2015) to RM16 billion demonstrates they do understand the situation,” he told reporters after the announcement of Petronas Group’s financial results for the fourth quarter and year-end financial year 2015 in Kuala Lumpur yesterday.
Also present was Petronas executive vice-president and group chief financial officer (CFO) George Ratilal.Wan Zulkiflee said after the implementation of the Goods and Services Tax (GST), Petronas’ component for government revenue went down.
On workforce restructuring, he said the matter would be announced within the organisation first before it is made public.“On restructuring and reorganisation, I would like to share with the organisation first and after that we will issue it to the media,” he said. Petronas wrapped up an extremely difficult 2015 with lower revenue and profit after tax amidst a depressed oil price environment and net impairment on assets.
It recorded a revenue of RM248 billion, a 25 percent decline compared to 2014. The reduced government divident in 2016 represents a drop of almost 40 percent compared to last year.
- Bernama
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[FONT=&]Read more: https://www.malaysiakini.com/news/332222#ixzz4M4xWrdpu[/FONT]
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Petroliam Nasional Bhd (Petronas) says it is committed to paying RM16 billion in dividends to the government this year, despite oil prices forecast to remain low in 2016.
Petronas president and group chief executive officer (CEO) Wan Zulkiflee Wan Ariffin said Petronas had persevered through the challenging year to remain profitable and fulfil its dividend commitment to its shareholders.
“We discussed dividend payment with the government and for the government to have a reduction from RM26 billion (2015) to RM16 billion demonstrates they do understand the situation,” he told reporters after the announcement of Petronas Group’s financial results for the fourth quarter and year-end financial year 2015 in Kuala Lumpur yesterday.
Also present was Petronas executive vice-president and group chief financial officer (CFO) George Ratilal.Wan Zulkiflee said after the implementation of the Goods and Services Tax (GST), Petronas’ component for government revenue went down.
On workforce restructuring, he said the matter would be announced within the organisation first before it is made public.“On restructuring and reorganisation, I would like to share with the organisation first and after that we will issue it to the media,” he said. Petronas wrapped up an extremely difficult 2015 with lower revenue and profit after tax amidst a depressed oil price environment and net impairment on assets.
It recorded a revenue of RM248 billion, a 25 percent decline compared to 2014. The reduced government divident in 2016 represents a drop of almost 40 percent compared to last year.
- Bernama
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[FONT=&]Read more: https://www.malaysiakini.com/news/332222#ixzz4M4xWrdpu[/FONT]
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Haha, is funny to see people are lecturing on snowbird about accounting, too paiseh to comment back liao. Is ok, not everyone expert on everything, we learn from each others. Using borrowed money can be double edge sword, use it wise can increase shareholder ROE, unwise any time your company belly up. First, I do feel that it is a good sign PETRONAS cooperate with Aramco, world biggest oil company, 4 times the size of Apple corp, to issue bond together, but Aramco itself also very un-transparent company, they might use the fund for other use instead fully on Pengerang. But the loan show their commitment for making pengerang into reality, cheap oil may mean downstream product cost will be cheaper to produce, and higher profit profit margin for end product. Having Aramco as partner is someway may provide the expertise that they need in the future.
2ndly, their bond creditworthiness can be seen by company bond ratings being evaluate by the big 3. I think snowbird had mistakenly assuming a company had to use debt mean this company tak boleh liao....really? even apple also borrow heap of money although they held pile of fresh cash. So the ultimate question will be, what is the debt being used for? and whether their short term cash flow is ok...if no reserves money left liao...or like what snowbird hope, use reserve money first in this difficult time, then the company may died faster before they seeing the oil market back into dawn. Anyway, we are grateful Snowbird is not running PETRONAS, if not the company will fly like bird liao lor.
3rdly, Malaysia big part (now 20-30% of budget) still come from PETRONAS, but it is up to Malaysia government want to tap into debt market to make this difficult time run more smoothly. I don't know why Malaysian kena brainwash by opposition, like over 60% GDP, then Malaysia going to bankrupt liao. They are trying to cheat and fool naïve ordinary people with lack of economy knowledge into believing Malaysia going to bankrupt soon. Structurally speaking, Malaysia economy is diversify enough to take the impact better...unlike Venezuela or even Saudi.
Lets hope the best for the budget, more money to Iskandar will be good news.
Paiseh, Internet to me is second to God and my teacher. I happened to also have chance to work in audit firm before I found more suitable job.
haha.....Ok same same, I also worked in audit firm before leh, but now in commercial liao..... Yah I also feel Bro Snowbird's analysis of Petronas is tak boleh, especially the part about being cashless.
To be fair, Petronas is the only Global Fortune 500 company in MY but unfortunately, it was managed by all the wrong people.
It is still the goose that lays the golden eggs and for years, they had been the major contribution to the annual budget.
Even in such tough times when their profit had shrunk by 90%, they still have to cough up RM16billion for the 2017 Budget.
To do this, the company has to make drastic cuts to their Opex and Capex by as much as RM50 billion in the next 3,4 years.
The company is retrenching staff instead of new recruitments so again, its bad news for the employment market.
Now that after 3 long years, the Canadian had approved new multi-billion LNG project in western Canada, Petronas is not rushing in.
This project actually benefits Canada more than Petronas in terms of job opportunities in Canada whereas the current low LNG prices is another negative factor.
So, how is the cash flow situation in Petronas now?
According to Fitch, "We expect Petronas to go free-cash-flow negative this financial year and next after meeting their capex and dividend requirements".
What is free-cash-flow negative, those accountants and auditors here should know but for those who are not sure, it simply means no money left over after paying for your immediate needs.
http://jakartaglobe.beritasatu.com/...7-billion-lng-complex-petronas-no-rush-start/
You could google free-cash-flow and operating cash flow for explanations
You mean you don't understand what Fitch said and don't understand what I'd said and you still need to google and still don't understand what is "to go free-cash-flow negative"??
Can someone please help to explain in more simple words.
No money left for the company and no money left this year means entirely different. They are facing negative cash flow as the business they run cannot generate sufficient revenue to overcome cost. But they did accumulate profit during bright day and they are tapping those money now. So is the business dead? If the business still generate positive operation cash flow, this business still can do. Im no way to comment as im not insider of the company, but if want to say wrong, PDVSA, Venezuela oil company definitely is the biggest mistake. Once low oil price, they cant even repair their facilities, straight away drowning. Even Aramco did better in managing as can be seen by their gigantic cash reserve. No oil company is doing good in this world, Aramco profit (they manage to earn money because of ultra low extracting cost) kena hit badly. You put LHL into Petronas now, he also cant make magic, turn company into profit...and there will be excess capacity when market is down, retrenchment make perfect sense, new venture havent on line yet, want to hire ppl in downstream oil related products also cannot. So how can you say the company run by wrong people when retrenchment show that they knew what they are doing.Go see US listed company, retrenchment happen, and is exactly right person will take this action when the situation allow.
Anyway, what is the extraction cost per barrel for Petronas? This should be the more direct question affecting operation cash flow.
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