PETALING JAYA: Corporate earnings in the final quarter of 2021 could be dampened slightly, following one of the worst floods to hit the country in recent history.

       The disaster, which occurred on Dec 17 and 18, has been dubbed the “once-in-a-hundred years rainfall” and is set to impact the businesses of local port operators and manufacturers, as well as the country’s plantation and tourism industries.

       CGS-CIMB Research in a report yesterday said it expects the severe flooding to lead to a slight dent in corporate earnings in the fourth quarter of 2021.

       “This will be due to lower production at the manufacturing facilities and estates as a result of damage caused by the floods or workers unable to get to work (because of the flood).

       “Other issues faced could include logistical challenges and shortage of materials, as port operations were affected by yard congestions made worse by the flood situation.”

       Following a media briefing with port operator Westports Holdings Bhd, CGS-CIMB said it was cutting its net profit forecasts for 2021 by 4% to reflect lower container volume.

       The research house said the net profit cut is due to the impact of yard congestion and the recent floods, which is likely to hurt throughput in the last two weeks of December 2021.

       “While workers should make their way back and help Westports restore most of its capacity by the end of this week, manufacturers and traders may encounter near-term production issues due to flooding, logistical challenges and shortages of raw materials.

       “As such, Westports’ container volume throughput may be negatively affected to a significant degree in the last two weeks of the year.”

       Additionally, CGS-CIMB said some companies could incur one-off costs to repair damages caused by the flood or to assist employees affected by the floods.

       “We reiterate our KLCI target of 1,495 points for 2021 and 1,612 points for 2022.”

       Additionally, CGS-CIMB said its checks with the plantation companies under its coverage revealed that some estates were affected by the flooding, which disrupted harvesting activities for the past few days.

       “Oil palm estates in Pahang and Selangor, which appeared to be worst-affected states by the flood, contributed around 18.5% of total crude palm oil production for Malaysia in the 11 months of 2021.

       “The tourism industry could also be affected as some sections of several major highways were impassable due to flooding and landslides.”

       Meanwhile, operators of some retail outlets that were affected by the floods also reported break-ins, which resulted in estimated losses amounting to several hundred thousands of ringgit.

       Among these operators was Mydin supermarket, which was among several stores within the flooded Taman Sri Muda area here that were broken into.

       Mydin Mohamed Holdings Bhd managing director Datuk Ameer Ali Mydin told The Star in a report yesterday that the estimated loss for his company was between RM200,000 and RM300,000.

       “It will be more if we take into account the damage to our premises. The burglars were armed with knives and parang and they stole our expensive watches and electrical appliances,” he was quoted as saying.

       However, Ameer said he forgave those who had broken into the retailer’s premises, noting that many were trying to stay alive.

       Separately, on Monday, Dutch chip-making equipment supplier BE Semiconductor (Besi) said it was lowering its fourth-quarter revenue outlook due to flooding affecting its main production facility in Shah Alam.

       “Besi believes that delays resulting from this weather event could cause its anticipated revenue for the fourth quarter of 2021 to decline by approximately 15% to 20%, versus the third quarter of 2021 as compared to prior guidance of a decrease of between 5% and 15%.

       “The impact of the flooding will have minimal effect on Besi’s planned ramping of hybrid bonding system production scheduled for the first half of 2022.”

       Also, on Monday, Panasonic Manufacturing Malaysia Bhd told Bursa Malaysia that its plant in Shah Alam was affected by the floods.

       “The production of fans and vacuum cleaners at the plant is disrupted for the time being and the company will need a week to assess the conditions of the machines and equipment that were affected by the flood waters.

       “The company has been informed that some of its suppliers were also affected by the flooding.”

       Panasonic added that it is unable to immediately assess the exact impact of the floods on its financial results for the third quarter ending Dec 31, 2021.

       “The assets at the plant are adequately covered by insurance. The operations of the other plant at Seksyen 15, Shah Alam has not been affected,” it said.

       Meanwhile, Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai was quoted in a Reuters report earlier this week as saying that damage to property, other assets and products, as well as production disruption, will impact industries in the Shah Alam and Klang districts.

       He warned that the losses could be in the millions of ringgit, pointing out, however, that companies are probably only in the midst of assessing the exact damages after the floods subsided.