PPB Group’s 2Q19 profit down 47.5%

by FARA AISYAH/ pic credit: www.ppbgroup.com

PPB Group Bhd’s net profit for the second quarter ended June 30, 2019 (2Q19) plunged 47.46% year-on-year (YoY) to RM159.98 million on weaker contribution from Wilmar International Ltd and the grain and agribusiness segment.

Earnings per share for the three months fell to 11.25 sen from 21.4 sen in 2Q18.

Revenue, however, increased 6.48% YoY to RM1.15 billion.

In an exchange filing yesterday, PPB noted the grain and agribusiness segment revenue increased by 11% YoY to RM809 million on improved flour prices, partially offset by lower sales of feed.

Its profit was lower at RM25 million from RM66 million in 2Q18, mainly due to higher raw material costs.

Revenue for its consumer products segment in the quarter remained flat at RM167 million against RM169 million in 2Q18, while profit was lower at RM1 million from RM4 million in the same quarter last year, attributable to lower sales of in-house products and higher operating costs at the bakery division.

Moreover, revenue and profit for PPB’s film exhibition and distribution segment in 2Q19 was up by 15% to RM146 million (2Q18: RM127 million) and 45% to RM21 million (2Q18: RM15 million) respectively, due to strong performance from 2019 blockbusters and theatrical distribution of local titles during the period.

Meanwhile, revenue and profit for PPB’s environmental engineering and utilities segment during the period was lower at RM36 million (2Q18: RM51 million) and RM3 million (2Q18: RM8 million) respectively as several new projects are at the initial stage of implementation.

For the quarter, its property segment recorded a revenue of RM16 million (2Q18: RM12 million) and profit of RM8 million (2Q18: RM6 million), mainly attributable to higher progress billing from the Megah Rise project.

PPB’s investments and other operations have combined segment profits of RM133 million in 2Q19, lower than RM247 million in 2Q18 as profit contribution from Wilmar was lower at RM117 million (2Q18: RM230 million).

PPB said its main business segments are expected to perform satisfactorily for the year, with Wilmar’s performance to continue contributing substantially to the overall profitability of the group.

“Notwithstanding a volatile commodity and foreign-exchange market, the grains and agribusiness segment will capitalise on its established market position and synergistic strategies to remain resilient. The segment is expected to perform satisfactorily,” it noted in an exchange filing yesterday.

The group expects the performance of the consumer products segment to remain stable, and film exhibition and distribution to be supported by the introduction of new cinematic technology and facilities in selected locations, the opening of new cinemas and strong title releases.

The environmental engineering and utilities segment will maintain its focus on replenishing the orderbook and exploring new project opportunities, while the property segment will continue executing existing projects and improve the yield of existing investment properties.

For the first half of 2019, PPB’s net profit declined 17.32% YoY to RM408.42 million, while revenue increased 3.59% YoY to RM2.31 billion.

PPB has declared an interim dividend of eight sen per share to be paid on Oct 2, 2019.