Mewah International MV4 0.00% has executed a share sale and purchase agreement on Apr 3 to acquire 100% equity interest in PT Kencana Inti Perkasa (PTKIP), an Indonesian company which owns and operates facilities in the palm oil business.

 

The acquisition consideration of IDR102 billion ($9 million) is a combination of share purchase price and takeover of shareholders and bank loan in PTKIP. The consideration will be funded by internal accruals, the company says in a filing.

 

Following the acquisition, PTKIP will become an indirect wholly-owned subsidiary of Mewah.

 

The net asset value of the shares being acquired is approximately IDR73 billion.

 

The transaction is not expected to have any material impact on Mewah' s consolidated net tangible assets or earning per share for the current financial year.

 

Mewah International MV4 0.00%   has reported earnings of US$99.5 million ($134.1 million) for the 2HFY2022 ended Dec 31, 2022, 78.6% higher y-o-y.

 

This brings the group&rsquo s earnings for the FY2022 to US$113.6 million, an all-time high.

 

Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 6.63 US cents and 7.57 US cents on a fully diluted basis.

 

For the FY2022, revenue increased by 24.8% y-o-y to a record US$5.43 billion. The higher revenue comes on the back of a 4.2% y-o-y increase in total sales volume of 4.3 million metric tonnes (MT). The revenue increase was also attributable to 19.8% y-o-y growth in overall selling prices during the year. During the year, the group&rsquo s bulk segment recorded a 23.6% y-o-y increase in revenue while its consumer pack segment saw a 28.7% y-o-y increase in revenue. Revenue for the 2HFY2022 increased by 22.2% y-o-y to US$2.73 billion.

 

Gross profit for the FY2022 increased by 15.4% y-o-y to US$372.9 million while gross profit for the 2HFY2022 grew by 38.5% y-o-y to US$248.6 million.

 

Operating margin for the FY2022 increased by 33.7% y-o-y to US$300.9 million on the back of higher operating margin of US$70.10 million per MT, 28.4% higher y-o-y. Operating margins for both segments grew on a y-o-y basis.

 

As at Dec 31, 2022, cash and cash equivalents stood at US$102.2 million.

 

A final dividend of 1.40 cents per share has been proposed, bringing the total year&rsquo s dividend to 1.55 cents per share, up from FY2021&rsquo s 1.08 cents per share.

 

&ldquo In the immediate future, we expect macro, geopolitical and climate volatility to continue. However our group has demonstrated three consecutive years of strong earnings and good cashflow, resulting in a significant increase in our equity base,&rdquo says the group in its Feb 28 earnings statement.

 

&ldquo Our large-scale integrated production facilities in Malaysia, expanding presence in Indonesia, established brands and widespread global supply chain network will enable the Group to continue to drive growth and success&rdquo , it adds.

 

A stock exchange filing on June 23 detailed that Ankar Pacific Assets' substantial shareholding in Mewah International crossed above the 6 per cent threshold, from 5.99 per cent to 6.01 per cent.

 

The relevant transaction involved 270,000 shares at an average price of 45.4 cents per share.

 

A filing back on Sept 4, 2020 declared that Ankar Pacific Assets had become a substantial shareholder of Mewah International with 15 million shares at 32.0 cents per share, acquired via a married deal.

 

The integrated agri-business focused on edible oils and fats reported a net profit of US$86.5 million in its FY20 (ended March 31) which was among its historical best performances.

 

On April 22, TC Stone Ltd acquired 788,200 shares of Mewah International (Mewah) via a married deal for a consideration of S$331,044 at an average price of 42.0 cents per share. This followed the acquisition of 642,600 shares at 42.5 cents per share on April 16.

 

The latest acquisition by TC Stone on April 22, has taken Mewah chairman and executive director Cheo Tong Choon' s total interest in Mewah from 48.03 per cent to 48.08 per cent. Executive director and CEO Michelle Cheo and executive director and COO Bianca Cheo Hui Hsin maintain respective total interests of 46.77 per cent and 46.89 per cent.

On April 16, TC Stone Ltd acquired 642,600 shares of Mewah International (Mewah) on the open market for a consideration of S$273,156 at an average price of 42.5 cents per share.

 

Mewah chairman and executive director Cheo Tong Choon, executive director and CEO Michelle Cheo Hui Ning, and executive director and COO Bianca Cheo Hui Hsin are all deemed interested in the shares of TC Stone Ltd as beneficiaries of SG Kleinwort Hambros Trust Company (Channel Islands).

 

The acquisition by TC Stone on April 16 has taken Dr Cheo' s total interest in Mewah from 47.98 per cent to 48.03 per cent. Ms Michelle Cheo and Ms Bianca Cheo Hui Hsin maintain respective total interests of 46.72 per cent and 46.84 per cent.

 

TC Stone' s preceding acquisition of Mewah shares was on Oct 23, 2019, with 31.8 million shares acquired in a married deal at 30.0 cents per share.

 

The recent acquisition followed on from Mewah reporting a net profit of US$86.5 million in FY20 (ended Dec 31) which was up from US$11.6 million in FY19 and among its historical best performances.

 

Mewah is a global agri-business, focused on edible oils and fats with refineries and processing facilities in Malaysia, Singapore and Indonesia, with established brands and sales to customers in over 140 countries.

 

As the chairman of Mewah, Dr Cheo is responsible for setting the strategic direction of the group. Under his direction over the past three decades, the group has expanded into refining, manufacturing and trading of palm oil and related products.

 

He also oversaw the expansion of the group into new businesses including biodiesel, rice, dairy and soap.

 

In FY20, Mewah was positioned to ride the strong demand from countries trying to guarantee sufficient internal supply of agri-commodities.

 

Dr Cheo noted that the group achieved a record sales volume of over 4.8 million tonnes in FY20 and observed concerns over tightening supplies in the edible oil complex led destinations to scramble for available stocks, pushing up the average selling price of crude palm oil by 29.6 per cent. Thin supply and increased demand in the second half of 2020 saw the price of crude palm oil surge to a nine-year high of RM3,841 (S$935) per tonne by the end of December 2020.

 

The two edible oil business segments of Mewah are the bulk segment, which accounted for 76.8 per cent of its FY20 revenue, and the consumer pack segment, which accounted for 23.2 per cent of its FY20 revenue.

 

The bulk segment produces and sells vegetable-based edible oil and fat products in bulk form primarily to distributors and factories involved in the production of confectionery, bakery products and other food items.

 

Ms Michelle Cheo noted that the group' s nine-fold increase in profit excluding exceptional items in FY20 was primarily attributed to the robust palm oil refining margins leading to significant growth recorded in the bulk segment.

 

The consumer pack segment produces vegetable-based edible oil and fat products, in consumer pack form and sells under own brands and under the brands of third parties, primarily to importers and distributors at destination markets.

 

Ms Michelle Cheo added that during the year, the group' s balance sheet and cash flows remained strong and healthy with its net debt to equity ratio improving from 0.65 in 2019 to a very conservative 0.34 in 2020.

 

She also noted that the robust balance sheet and well-balanced portfolio strategically places the group to embrace opportunities as they arise and explore possibilities that avail to increase value chain participation, manufacturing facilities diversification, or expand its geographical footprint.

 

Ms Michelle Cheo joined the group in 2003 and is responsible for the formulation and execution of the overall strategy of the group, new business development, project execution, corporate risk and factory operations.

 

Ms Bianca Cheo joined the group in 2004 and heads the consumer pack segment over which she has overall responsibility.

 

Earlier this year, on Feb 24, Mewah appointed A Ghani Bin Othman as non-executive and independent director. He currently sits on the board of Trustees of the Malaysian Institute of Economic Research and was former chairman of Sime Darby Plantation, Sime Darby, and Sime Darby Property. He was also a member of the Board of Trustees of the World Islamic Economic Forum between 2013 and 2020, and served 18 years as Chief Minister of Johor, chairman of Johor Corporation and co-chairman of Iskandar Regional Development Authority from 1995 to 2013.

 

The share price of Mewah has gained 24.2 per cent to 41.0 cents in the 2021 year to April 22, from 33.0 cents at the end of 2020. At the same time, the average daily turnover of the stock has grown more than fivefold from 2020 levels.