JCorp to make oil and gas core business

JOHOR BARU: Johor Corporation (JCorp), which expects to list its oil and gas unit E.A. Technique (M) Bhd by the third quarter of this year, expects to make oil and gas its core business by 2017, according to its president and CEO Datuk Kamaruzzaman Abu Kassim (pix).
"We have to build our foundation first, hopefully by 2016 or 2017, it (oil and gas business) will become our core business," he told a press conference here yesterday in conjunction with the launch of its 2013 annual report.
"Now we're providing liquid jetty services and developing for marine support activities at our Tanjung Langsat port and industrial complex, which could complement the Pengerang Terminal project.
"As long as Petronas continues with its investment, the state has a role to make sure the development of the area will be according to the plan," Kamaruzzaman added.
The group's oil and gas division currently contributes an insignificant 5% of profits.
According to Kamaruzzaman, the proposed listing of its oil and gas arm E.A. Technique is a prelude for JCorp to go into the oil and gas sector in a big way.
"This will allow us to strengthen marine vessel services for the provision of transport and offshore storage as well as port services," Kamaruzzaman said.
Also present at the press conference were Johor Mentri Besar cum JCorp chairman Datuk Seri Mohamed Khaled Nordin, as well as chief secretary to the government cum JCorp vice chairman Tan Sri Dr Ali Hamsa.
When asked on other potential listing plans, Kamaruzzaman said no new listing plan is in the pipeline apart from E.A. Technique, stressing in particular that there is no intention to relist its property arm Johor Land, which was privatised in July 2009.
On the re-listing of QSR Brands Bhd and KFC Holdings (M) Bhd, Kamaruzzaman said "there is still long way away".
JCorp had mentioned before that the food and quick service restaurants business will be re-listed in the future, provided the two companies are leaner and in a better financial position.
To recap, QSR and KFC were taken private by JCorp, together with Employees Provident Fund and CVC Capital Partners back in December 2012 for RM5 billion.
Currently, the listed entities of JCorp are Kulim (M) Bhd, KPJ Healthcare Bhd, Al-Aqar Healthcare REIT, Damansara Realty Bhd and the London-listed New Britain Palm Oil Ltd.
Kamaruzzaman said this year the group, which has set aside RM800 milion for capital expenditure, will continue to focus on plantation, healthcare and property businesses, which collectively contributed 85% to the group's pre-tax profit last year.
JCorp recorded a pre-tax profit of RM1.37 billion for the financial year ended December 31, 2013, a huge jump of 121.39% from RM617 million a year ago, exceeding the RM1 billion mark for the first time.
Its net profit also surged 195.13% to RM1.15 billion from RM390 million a year before.
The group is confident to repeat the success this year, underpinned by stronger economic forecast, prudent financial management and core businesses' growth, but noted that the business environment will be affected by developments abroad.
Kamaruzzaman said as the top earnings contributor of about 46%, the outlook for the plantation sector looks promising, driven by higher fresh fruit bunches (FFB) yield, higher crop and lower production cost.
"The future growth of the plantation sector will be largely driven by overseas businesses, including Indonesia, Papua New Guinea and Solomon Islands," he added.
After acquiring 40,645ha of oil palm land in Kalimantan last year, the group currently holds more than 200,000ha landbank.
Speaking about its healthcare business, Kamaruzzaman said the expansion through acquisition plan will continue, to strengthen its network of 27 private specialist hospitals in Malaysia and abroad.
On the property front, the group has no immediate plan to go overseas but does not rule out the possibility of tapping into the markets that have healthcare business' footprint.
"Now we're focusing on local front, committed to delivering 8,000 units affordable homes within Iskandar area by 2020, while on track to complete the RM400 million Komtar JBCC shopping centre redevelopment project.
"Komtar JBCC achieved 87% take-up rate as of end-March, with the soft opening targeted for this July," he said.
Meanwhile, the group also said its 10-year Strategic Business Transformation Plan, which started in 2012, is progressing well to enhance diversified business presence in the Asean region and to achieve zero gearing by 2022.