Where Is The Dividend?

Malaysia-based utilities player, Ranhill Holdings Berhad (Ranhill) has recently announced its latest Q2FY16 result on 5 August 2016. As per the announcement, there was no mention of any interim dividend to be declared. Ranhill has been trading sideways / range bound as there is no major positive catalyst coming out from this company. As the Company is in the utilities sector, dividend yield is an important investment merit for the investors. It is not unusual that investors are anxiously waiting for this Company to declare its maiden dividend since its successful listing on Bursa early this year.

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As per the notes to the latest quarterly result, the Company is in the midst of sorting out its guarantee arrangement with its Guarantors with respect to its existing Sukuk programme. We believe that once this matter has been sorted out, this may potentially facilitate future dividend payments by the Company.

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Assuming the Company is able to declare dividends for FY16, the following is a high-level desktop estimate of projected dividend for the Company:

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Our key assumptions:

  1. Assuming a dividend payout ratio of between 50% – 70%
  2. Q3 and Q4 FY16 are based on Q2 FY16 PATMI (excluding the effects of negative goodwill)

Whilst investors are waiting for the maiden dividend to be declared by the Company, the comforting point is that Ranhill has the backing from institutional investor such as Lembaga Tabung Haji (LTH). As shown below, LTH has been gradually accumulating its position in the Company:

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LTH currently holds 6.592% of total shareholding in Ranhill.

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Author: Ken Utau

Data Scientist, Markets Analyst and Food Lover

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