Special dividend lifts Tasek Corp share price

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KUALA LUMPUR (Nov 5): Tasek Corporation Bhd has advanced 1.18% to RM17.20 in the morning trade, after declaring a special dividend of 50 sen yesterday despite a lower net profit registered in 3QFY14.

At 9:56 am, the cement maker has climbed 1.18% or 20 sen to RM17.20, with some 104,000 shares changing hands. It was the third largest gainer across the local bourse.

Yesterday, Tasek Corp has declared a special dividend of 50 sen, in conjuction with the company’s 50th anniversary.

However, its net profit dipped 7.1% to RM21.47 million in the third quarter ended Sept 30, 2014, down from RM23.12 million a year ago, mainly due to thinner profit margins from the cement segment arising from intense price competition.

It said in a filing yesterday that the lower sales volume from the concrete segment, lower share of profit from the group’s associated company, as well as drop on interest income, had also affected its net profit.

The group’s quarterly revenue grew 3.3% to RM148.68 million, up from RM143.93 million a year ago, amidst stronger demand for cement in the domestic market.

Nevertheless, CIMB Research analyst Sharizan Rosely said in report today that although Tasek's annualised 9M14 core net profit was 102% of its forecast, “We deem it broadly in line as we expect intensified price competition and sustained cost pressures in 4Q.”

Sharizan noted that the main positive was the higher special interim single-tier DPS of 50 sen in conjunction with the group's 50-year nniversary but  this was unlikely to be sustained.

“Based on our industry checks, the general expectation for overall cement demand growth is circa 4% in 2014 compared to 5% to 6% in 2013,” he added.  

The research house is maintaining a “hold” rating with a higher target price of RM16.85 from RM15.30 previously.