Bloomberg, March 28, 2012

By Can Yen Kuan

YTL Corp., the best performer on Malaysia's benchmark index this year, may buy power, cement or property assets in Asia in the next six months to expand its business in the region, Managing Director Francis Yeoh said.

The utilities and construction group has identified targets and may make a purchase in the second or third quarter, Yeoh, 57, said in an interview yesterday in Kuala Lumpur, declining to be more specific. The company may boost dividend payouts to the highest level in four years following its takeover of unit YTL Cement Bhd., he said.

"There are some opportunities looming" for acquisitions, Yeoh said. "We've got a lot of good things going on. We have 13 billion ringgit ($4.2 billion) cash. We can grow organically or we can acquire assets."

A large overseas acquisition would be the first in three years for YTL, which has climbed 18 percent this year, compared with the FTSE Bursa Malaysia KLCI Index's 3.6 percent gain. Excluding banking stocks, the Kuala Lumpur-based company's cash position is the second-highest after Genting Bhd., boosted by income from power generation and growth in cement production.

The shares were unchanged at 1.75 ringgit as of the 12:30 p.m. trading break in Kuala Lumpur.

YTL's cash pile puts the company in a "very good" position to make purchases abroad, Yeoh said.

"I'm attracted to Asia because somehow the reservoir of money will be in Asia," Yeoh said. "Asian currencies are predominantly undervalued compared to the U.S. dollar. In a way, there is less risk buying Asian assets."

YTL Power International Bhd., 45 percent owned by YTL, agreed in December 2008 to buy Singapore's PowerSeraya Ltd. for S$3.6 billion ($2.9 billion).

Dividend Payout

Yeoh said in April last year that YTL may purchase its units if it can't find suitable companies to acquire. The company made a 1.06 billion-ringgit offer in December to buy out YTL Cement through a share swap. Yeoh declined to comment yesterday on whether there is an imminent plan to take over another subsidiary.

The company may double its dividend payout, which was 2 sen per share in the year ended June 30, after the purchase of YTL Cement, Yeoh said. That would be the highest level since fiscal 2008, according to data compiled by Bloomberg.

The acquisition may add 165 million ringgit to the group's profit in the year ending June, Yeoh said, based on his calculations. Group revenue may rise to 20 billion ringgit, he said. The company had net income of 1.03 billion ringgit and sales of 18.3 billion ringgit in the year ended June 30, according to its annual report.

"By taking over YTL Cement, you would hope that you can pay more dividens to shareholders, " said Yeoh. "That would be the expectation and I think we can meet the investors' expectation."