Puncak Niaga expected to pay out cash dividend soon

PETALING JAYA: Puncak Niaga is expected to deliver the cash dividend of RM534 million, or RM1 per share on a fully-diluted basis, to shareholders by year-end, or latest in the first quarter of 2016, said AmResearch.
RHB Research, meanwhile, noted that if the group were to fully distribute the cash proceeds to its shareholders, this would imply a special dividend per share of RM2.91 based on its fully enlarged share base of 534.6 million.
"We expect the quantum of the special DPS to be confirmed in Q1 2016, with physical payments to take place thereafter," it added.
On Thursday, Puncak Niaga announced that it had received the balance purchase price of RM1.55 million (of the total of RM1.5 billion) from Pengurusan Air Selangor Sdn Bhd. As such, the proposed disposals have been completed.
The announcement marks a major milestone in the state's water restructuring exercise following seven years of impasse. The state government is expected to start negotiations with the other two concessionaires – Konsortium Abbas Sdn Bhd and Syarikat Pengeluaran Air Selangor Holdings Bhd (Splash).
Meanwhile, Puncak has earmarked the remaining of the proceeds of about RM1 billion for either oil & gas or palm oil plantation ventures.
"With the proceeds in hand, we expect the group to actively seek out new opportunities in the coming months," said AmResearch, noting that Puncak's next move will be crucial in other to fill the earnings gap following the sale of its water concessionaire businesses.
For the six-month period, the oil and gas division posted losses of RM20 million while the water construction arm made a profit of RM2 million.
AmResearch is maintaining a "hold" call on Puncak Niaga while awaiting its next move beyond the dividend payout.

RHB Research expects Puncak Niaga to close in the red for FY15 amidst the oil & gas industry's headwinds following the slump in crude oil prices.
"We believe the group would return into the black by FY16, as we gathered that management is implementing various costs-cutting measures to help boost profitability over the medium term," it said.
RHB Research has given a "buy" call on Puncak Niaga, with an unchanged target price of RM3.25.