KNM drops 11% in active trade on non-payment of Thai bonds
KUALA LUMPUR (November 19): KNM Group Bhd shares fell in morning trading on Bursa Malaysia on Friday (November 19) after the oil and gas equipment services group said it missed principal and coupon payments on Thai bonds worth RM 352.57 million as it encountered challenges due to the Covid-19 pandemic, in addition to unfavorable conditions at its subsidiary Impress Ethanol Co Ltd (IECL) in Thailand.
The counter opened at 16 sen, down 11.11% or two sen from its previous close.
At the time of writing, KNM – the most active stock on Bursa so far – had cut its loss, still down one sen or 5.56% to 17 sen.
At 17 sen, the stock had a market cap of RM568.34 million.
The meter had plunged 50% from its peak of 32 sen on September 7. Since the start of the year, it has fallen 22.73%.
Some 44.37 million shares have traded so far in the day, which is lower than its 200-day average volume of 68.09 million.
KNM stated that the non-payment event could have a negative impact on the group’s financing facilities as well as on its subsidiaries in the event that the respective financial institutions suspend their financing facilities granted to KNM pending the resolution of the ‘non-payment event.
The group also noted that it is at an advanced stage of discussions with several financial institutions to secure new financing for the repayment of the bonds, but said final approval decisions on the new financing facilities are not expected. be taken before the due date. obligations.
The bonds matured on Wednesday. The company has a grace period until December 2 to pay the principal and until December 9 to pay the coupon before an event of default occurs.
For the second quarter ended June 30, 2021 (2QFY21), KNM’s net profit decreased 5.91% to RM 10.56 million from RM 11.22 million for the same quarter last year, Quarterly revenue having fallen 26.14% to RM 245.98 million from RM 333. 03 million for 2QFY20.
The group said the drop in net profit and revenue was largely due to the slow replenishment of orders caused by the Covid-19 pandemic around the world.
For the cumulative six-month period ended June 30, 2021, net profit fell 72.84% to RM 8.55 million from RM 31.48 million a year earlier. Six-month cumulative revenue, on the other hand, declined 28.73% year-on-year to RM 477.21 million from RM 669.59 million.
Regarding its outlook, KNM expects the outlook for FY21 to remain difficult due to continued uncertainties in the global economic outlook resulting from the impact of the Covid-19 pandemic.
“The underlying industries that determine our business outlook, such as oil and gas, petrochemicals and energy, will remain difficult as recovery from the disruption of the Covid-19 pandemic depends largely on the speed of roll-out of vaccination in the majority of countries. populations, stability of crude oil prices and resurgence of the Covid-19 pandemic, especially in Asia.
“The board will take the necessary steps to manage and mitigate these uncertainties. We believe that with the various efforts undertaken by different governments, the global economy will show an improvement towards the end of 2021 with higher vaccination rates and easing of lockdowns, especially in large economies like the United States. , Europe and China, ”he added.
KNM misses Thai bond payments amid pandemic challenges and adverse operating conditions at subsidiary