Shareholders of Borneo Oil Berhad (BornOil) have good reasons to be smiling from ear-to-ear in recent times.
This year, the company has rewarded its shareholders via a capital distribution in the form of Bonus and warrants. And if one were to go back in time to two years ago when the company had a rights issue, the yield has been commendable. For example, if you had bought a share at 60.5 sen and participated in the rights issue in Sept 2015, you could have enjoyed a yield of approximately 32%.
If the Bonus and warrant D distributions can achieve a capital appreciation of a similar 32% in 24 months from the month of June 2017, shareholders would have more reasons to be happy. Should it materialise, it would serve as reward for investing in our company committed to its pursuit in its core businesses to driving value for shareholder.
And indeed, shareholders have good reasons to be optimistic given that BornOil’s various divisions have been growing from strength to strength in recent times.
When contacted by BizVantage360, BornOil executive director Raymond Teo (pic) expressed his excitement for the gold mining division’s forthcoming heap leaching project.
He also expressed his excitement about how the market will react to ‘Borneo Asian Food’ , “Broasted” by Sugarbun (in the east coast of Peninsular Malaysia), Aunty Franklee’s entry to Singapore and food stations to be operated by Tong Meng in Menara Hap Seng 2, Kuala Lumpur. These sub brands from Sugarbun will help to drive both the top and bottom line in the later part of 2017and the early part of 2018, said Teo.
- Teo summarised that the food division’s strategy is as follows:
- Staple, healthy, home cooked, authentic and wholesome food, to be eaten and taken almost daily.
- In a clean and efficient environment.
- Where Franchisees can set up with minimum capital and can commence business faster due to shorter duration required for renovation.
- Allowing customers to stay focused of what they want.
- Singular product and simplified menu to ease ordering and speed up serving time.
- Easy to operate with minimum workforce and shorter training duration for the same.
Currently, BornOil has 89 SugarBun 49 Pezzo, 3 Borneo Asian Food, 1 Aunty Franklee (Pilot) and 2 Tong Meng outlets.
Meanwhile, BornOil’s limestone marble production is providing a bottom line profit in the form of royalties presently and the supply of limestone to the cement industry in Sabah will also contribute in the future.
What’s more, with the completion of the vertrolysis biomass plant in December 2017, the conversion of palm oil biomas to biochar, biofuel and biogas will bring new impetus to the palm oil industry in Sabah.
Also in the current financial year, BornOil has also acquired limestone quarries for marble block production. On this initiative, Teo said: “Good grade limestone is cut into marble blocks for export. Since the commencement or the marble block productions in January 2017, over 300 containers have already been exported by the operator.”
“Sabah imports approximates 1.5m to 2m tons of cement annually. If a clinker and cement plant is to be set up, we will be in a strategic position to participate in the supply of limestone to the same,” he added.
Teo summed up our interview by expressing the company’s intention of positioning to investors that the BornOil Group would appreciate in value for long term investors.
He believes that the rewards will be enormous when the BornOil Group’s various businesses move into full operational mode:
- Food franchise – global in nature.
- Gold mining and trading – real and perpetual value in nature.
- Biomass conversion – global player in the conversion of palm oil biomass, to biochar, biogas and biofuel. “Malaysia and Indonesia have over 200m tons of palm oil biomass yearly, as both the countries together produce 85% of the world’s edible palm oil yearly,” said Teo.
- Limestone – main and monopolistic supplier of limestone to the cement industry in Sabah and the BIMP-EAGA.
- Properties – sitting on some of the most beautiful spots in Sabah with tremendous potential for lifestyle living and tourism.
- Note: The above article is not a recommendation to buy or sell stocks. Please consult your stockbroker before making any investment decision.