Covid-19 to weigh on PPB’s film, property businesses

by FARA AISYAH / pic by RAZAK GHAZALI

PPB Group Bhd expects its film exhibition and distribution, and property segments to remain disrupted by the Covid-19 pandemic.

“The film exhibition and distribution segment will continue to be affected by cinema closures and deferral of movie titles in the fourth quarter of 2020 (4Q20).

“The management will continue to implement cost optimisation measures and stringent cashflow management to deal with the current challenging operating environment,” the group said in an exchange filing yesterday.

It added that the performance of the property segment, both in investment properties and property development, is expected to remain challenging.

PPB has implemented various measures to address the reduced footfall in its malls and slower sales of properties brought about by the Covid-19 pandemic.

The group’s other main business segments — which are mainly in the production and distribution of staple food and services — are expected to perform satisfactorily.

Wilmar International Ltd’s performance will continue to contribute substantially to the overall profitability of the group moving forward.

For 3Q20, PPB’s earnings was up 4.41% year-on-year (YoY) to RM411.57 million, or 28.93 sen per share, from RM394.18 million, as profit contribution from Wilmar climbed to RM409 million from RM342 million in 3Q19.

The group’s quarterly revenue decreased 12.61% YoY to RM1.04 billion from RM1.19 billion in 3Q19.

For the cumulative nine-month period, PPB’s net profit rose 16.07% YoY to RM931.57 million, while revenue dipped 12.57% to RM3.06 billion.

Its grains and agribusiness segment revenue was lower by 3% YoY to RM825 million in the three months’ period, mainly attributed to lower sales of flour and feed.

The consumer products segment revenue for 3Q20 dropped 6% YoY to RM146 million as it recorded a loss of RM823,000.

PPB’s film exhibition and distribution segment revenue for July to September 2020 was significantly lower at RM26 million against RM135 million in 3Q19, mainly attributable to the closure of cinemas at the height of the Movement Control Order (MCO) and low admissions due to the deferment of movie releases by major distributors.

The environmental engineering and utilities segment revenue for 3Q20 was RM48 million, lower than RM61 million in 3Q19, mainly due to work delay during the MCO period.

Its property segment revenue for 3Q20 remained at RM15 million, mainly attributable to lower rental income and the absence of a one-time gain on disposal of property in 2019 of RM4.7 million.

PPB’s share price ended four sen, or 0.21%, lower yesterday at RM18.80, giving it a valuation of RM26.74 billion.