KUALA LUMPUR: Chemical Company of Malaysia
Bhd (CCM) is selling its loss-making fertiliser business for RM48.5mil to Hextar Fertilizers Group Sdn Bhd as it seeks to focus on its pharmaceuticals and chemicals divisions.
It also announced on Thursday its units had signed conditional share sale agreements with Hextar Fertilizers Group Sdn Bhd to sell its 100% equity interests in CCM Agriculture Sdn Bhd and CCM Agriculture (Sabah) Sdn Bhd.
“CCM's fertilisers division has been facing tough challenges which saw a decline in its volume sold to all of its market segments,” it said.
CCM added that prolonged negative market conditions and bearish market outlook as its major customers – comprising oil palm plantation houses – trending down to cheaper fertilisers would reduce demand for ammonia-based fertilisers.
It also said the division had been incurring financial losses since 2013 and the exiting of the fertilisers business would allow the company to place greater attention on enhancing the business profitability of its pharmaceuticals and chemicals divisions.
Upon completion of the proposed disposals, CCM Group is expected to realise a loss on disposal of approximately RM52.27mil.
The loss on disposal is expected to reduce CCM's earnings per share by about 11.50 sen based on weighted average number of CCM shares in issue of 454.63 million shares at FYE Dec 31, 2015
CCM also said it was selling two parcels of mixed zone/town land in Bintulu to Hextar Synergy Sdn Bhd totalling 7.78 hectares for RM35mil.