THAT a lack of corporate governance can lead to financial irregularities, and threaten the survival of a company, is something that Destini Bhd

Having come a long way from a decade ago, when the integrated engineering solutions provider – then known as Satang Holdings Bhd – was embroiled in financial irregularities that almost brought the company down, Destini is now more determined than ever to have its business run in a transparent and accountable manner.

That’s what Datuk Rozabil Abdul Rahman (pic), president and group chief executive officer of Destini, told reporters recently after the company’s AGM over the week.

“I will make sure that the company will continue to be run professionally, as an entrepreneur, with adherence to corporate governance,” he asserts.

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He has a 4.16% direct stake, and an indirect interest of 21.05% in the company that is also in the oil and gas (O&G) business where it undertakes decommissioning of oil wells.

The second-largest shareholder in Destini is Aroma Teraju Sdn Bhd, a Finance Ministry-controlled entity, with a 17.3% stake.

Despite perception that Destini’s fortunes are tightly connected to the previous government under Barisan Nasional – by virtue of its heavy dependence on government contracts – Rozabil calls on investors to judge on its performance since he took over the company and the future plans that he has in store for it.

He further stresses that his political alignment is not a factor in determining the company’s fortunes.

“History shows that when I took over Destini and managed to turn around the company within a year, I had run it as a businessman and not as a politician,” Rozabil says.

“The result speaks for itself ... I cannot control people’s perception,” he adds.

Business turnaround

When Rozabil emerged in Destini in early 2011, his main purpose was to turn around the company, which was then still known as Satang.

Since taking over the helm, Rozabil has managed to grow the company’s business outside the Malaysian shores and the company has turned consistently profitable since 2012.

Among the restructuring initiatives undertaken is the strategic acquisitions of various companies to diversify Destini’s income stream.

These include Vanguard Composite Engineering Pte Ltd, a Singapore-based company involved in the manufacturing, servicing and maintenance of lifeboats, life rafts and davit systems; and Samudra Oil Services Sdn Bhd, which is involved in the provision of tubular handling services in the O&G sector and is a Petroliam Nasional Bhd licence holder.

Satang ran into trouble in 2008 after facing auditing issues, which revealed that its unaudited net profit for the financial year ended Sept 30, 2007 had been overstated by a staggering 631%. The company actually posted a net loss of RM26.71mil instead of a net profit of RM5.02mil as was previously stated in its unaudited financial results.

Satang slipped into the Practice Note 17 (PN17) status in May 2008 and had its stock suspended from trading for nearly three years from July 2009.

In 2011, the regulators publicly reprimanded Satang and fined the board of directors a total of RM180,000 for breaching Main Market listing requirements by failing to maintain an audit committee since Nov 1, 2010.

The company changed its name to Destini in September 2011. And following a regularisation plan, Destini was lifted out of PN17 category in April 2013.

Open tender

Destini’s shares have succumbed to heavy selling in recent weeks after the 14th General Election (GE14) that saw a change in government to Pakatan Harapan. This is because of the view that it is one of the politically-linked stocks with huge reliance on government contracts.

On that note, Rozabil says his focus remains on building up the business of Destini. He will not be distracted by the company’s recent share price performance.

“My focus is to build up the business, and let the company’s performance speak for itself,” he says.

“I’m here to manage the business to ensure that it consistently generates good profits and dividends to shareholders,” he adds, pointing to the company’s recently approved dividend policy of between 30% and 40% of net profit as a sign of its commitment to shareholders.

To reduce Destini’s reliance on government jobs, which contributed close to 80% of its revenue in 2012, Rozabil says the group will continue to seek more private commercial jobs and expand its reach geographically to fuel growth.

“Right now, our dependence on government contracts is still high but since last year, we have been quite active in seeking more commercial jobs,” Rozabil says.

He aims to change Destini’s revenue composition to 60% commercia

ada momentum today

during the agm last week, company approved share buy back.they never had it before. plus, destini is now adopting a dividend policy. cheap stock, steady business, present contracts can last 2 1/2 years with growth from commercial, and international esp oil & gad, and now dividend coming into play.

go and check, this company is the only centre of excellence for martin baker aviation, oem for ejection seat, in the world. they invested in staff, technology and know how. if not because of change of shareholders to amroc ownership, they should have secured big overseas contract in abu dhabi.

Mercury TP 70c

hope their Q result is better. plus they are a competitive player in passport and ID. forget about rozabil an umno man, he is as far as i know a businessmen 1st

adoi, kept on going down.

Destini Bhd - 1QFY18 - Stronger quarters ahead, forecasts maintained

Author: kltrader | Publish date: Thu, 31 May 2018, 12:17 PM
Yoy, 1QFY18 revenue and net profit declined by 38.5% and 22.9% respectively

Destini’s 1QFY18 revenue and net profit declined by 38.5% and 22.9% to RM137.6m and RM7.7m respectively compared to 1QFY17 mainly due to lower contributions from the aviation manufacturing business, i.e. the helicopter supply contract, which is scheduled for delivery in 4QFY18.
Qoq, 1QFY18 revenue and net profit increased by 27.4% and 37.1% respectively

Sequentially, 1QFY18 revenue and net profit increased by 27.4% and 37.1% due to stronger MRO services billings which more than offset lower contributions from the aviation manufacturing business.
LHDNM withdrew Writ of Summon and Statement of Claim

Destini also announced that Lembaga Hasil Dalam Negeri Malaysia (LHDNM) has withdrawn its Writ of Summon and Statement of Claim (for outstanding tax payable amounting to approximately RM6.6m) and the High Court has awarded RM2,000 to Destini as cost.
Stronger quarters ahead on the back of on-going, new and potential projects

While the 1QFY18 net profit of RM7.7m constitute just 20.8% of our full year FY18F forecast of RM37.1m, we expect stronger quarters ahead on the back of on-going and new projects as well as prospective projects in its tender book.
Outstanding order book is estimated to have surged past RM1.0bn again

With the contracts secured in the last two months, we estimate that outstanding order book of the group has again surged past RM1.0bn, from around RM930m in January 2018. New contracts secured include the additional RM138.0m on top of the existing contract to provide MRO services and the supply of safety and survival equipment to the Royal Malaysian Air Force, an umbrella contract for the provision of well abandonment integrated services for PETRONAS Carigali SB, and the tubular running services contract valued at approximately RM31.8m in Pakistan. Stronger oil prices have also boosted the businesses of the Vanguard Group and TF Corp Group as well as AMS Marine (S) Pte Ltd. Destini has also secured additional certifications for the provision of line maintenance for commercial airlines. These and outstanding contracts for the provision and supply of MRO services, helicopters and OPVs are expected to boost profitability in the coming quarters.
Bidding for more contracts

Furthermore, Destini has a large tender book both locally and overseas. It has entered into a MOU with Felcra Processing & Engineering SB (FPESB) to provide MRO services to all FPESB’s industrial plants and equipment as well as building maintenance services on industrial, commercial and residential properties owned by FPESB. Other potential contracts include offering safety survival MRO services to more government agencies; full ground handling services for civilian airlines; MRO and supply of more helicopters as well as building more OPVs and NGPCs; offering rail MRO services and the supply of rolling stocks and spares; and in O&G, expanding decommissioning services and fabrication for the downstream sector.
Proven capability and track record of timely delivery at competitive pricing

We continue to like Destini for its proven capability and timely delivery of services at competitive pricing, strengths which are important to a new government facing budgetary constraints and which emphasize efficiency and transparency. Its balance sheet remains strong with a healthy cash balance and minimal gearing.
Maintain BUY with an unchanged target price of RM0.70

We maintain our FY18F and FY19F forecasts and price target of RM0.70 (pegged to an unchanged CY19F PE of 17.1x) for Destini. Its share price has fallen further following the change in government after the recent GE14 and global equity market volatilities. Our BUY rating is maintained.

Source: Mercury Research - 31 May 2018

SHAH ALAM: Datuk Rozabil Abdul Rahman says investors should judge him based on his track record in turning around the previously loss-making Destini Bhd
image: https://cdn.thestar.com.my/Themes/img/chart.png

and not on his political alignment when making their investment decision.

The president and group chief executive officer of Destini asserts that he has always remained focused on building up the business of the integrated engineering solutions provider and would not be distracted by the company’s recent share price performance.

“History shows that when I took over Destini at end-2010 and managed to turn around the company within a year, I had run it as a businessman and not as a politician,” Rozabil said.

“The result speaks for itself ... I cannot control people’s perception. But I will make sure that the company will continue to be run professionally with adherence to corporate governance,” he said after the company’s AGM.

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Destini is also in the oil and gas business where it undertakes decommissioning of oil wells.

Rozabil controls Destini with a 4.16% direct stake, and an indirect interest of 21.05% in the company.

He emerged in Destini in 2011 when it was known as Satang Holdings Bhd and categorised as a Practice Note 17 company. Satang also had corporate governance issues.

Since Rozabil took over the helm, Destini’s business has grown outside the Malaysian shores and it has been consistently profitable.

The second largest shareholder in Destini is Aroma Teraju Sdn Bhd, a Finance Ministry’s controlled entity, with a 17.3% stake.

After the recent 14th General Election (GE14) that saw a change in government to Pakatan Harapan, Destini’s shares had succumbed to heavy selling due to the view that it is one of the politically-linked stocks with heavy dependence on government contracts.

Towards this end, Rozabil said Destini would continue to reduce its reliance on government jobs by actively seeking more private commercial contracts and expanding its reach geographically.

“Right now, our dependence on government contracts is high but since last year, we have been quite active in commercialisation.

“We are working towards having commercial contracts account for 60% and government contracts 40% of our revenue in the next three years,” he said.

In addition, Rozabil said he expected overseas jobs to contribute around 30% to 40% of the group’s revenue, driven by oil and gas and marine fabrication works in Singapore, in the next two to three years.

Besides Malaysia, Destini has operations in Myanmar, Singapore, China, Australia, the United Kingdom and the Middle East.

On the government’s open tender policy, Rozabil said he believed it would benefit Destini.

“It is better to have open tender; I believe we stand a better chance to secure contracts based on our financial strength and capabilities,” he explained.

“We have been building the company by investing in people, equipment and technology.”

The counter was down again yesterday, falling one sen to close at 21 sen. This represented a decline of 51.2% from its share price of 43 sen on May 8 before GE14. Year-to-date, Destini’s share price had fallen 59.6%.


Read more at https://www.thestar.com.my/business/business-news/2018/05/31/rozabil-judge-me-by-record/#AVqdaCIZhYYMW1YB.99

This stock has potential, MRO works will always be there. They are a specialist.

this is a superb company. DD exceeding SS all the time

the indian venture is really killing maxis

traction is there

hoping that Q result would be better, after all the restructuring plans shared earlier. they have good accounts overseas

with government's policy direction towards open tender, Iris stands a good chance

up and up, support is there.

Destini's contracts not based on direct nego. they should do well when the dust settles. have faith. good buy

buy buy

axiata has upside potentials. the problem is for axiata - dependency or contribution concentration ratio from celcom is high and so when celcom sneezes, axiata gets a cold. nevertheless, edotco is a big star in its portfolio. i hope their digital bets really works out

agreed with kevin, this company has projects overseas and expanding. analyst report says it has the service has barriers of entry with international certification etc. i think the run down is due to impulse sell, foreign loading out and margin call pressure

Politik politik pun, despite report that says rozabil is a party card holder of previous regime, he is also linked to present govt. his father - dato abdul rahman, i heard, is one of the founders of PKR

Price is already rock-bottom. good prospects to buy. People said company is politically linked to previous guard but this is business, all companies have to be in the good book. Fundamental is strong. But this is life man...