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PPB Group Achieved A 68% Increase In Pre-tax Profit Of Rm991 Million For 1h2022

FINANCIAL HIGHLIGHTS FOR 1H2022

  • For 1H2022, PPB Group revenue increased by 34% to RM2.96 billion whilst Group pre-tax profit rose 68% to RM991 million. All key segments recorded improved performance coupled with the increase in contribution from Wilmar International Limited (“Wilmar”) by 67% to RM992 million.
  • Group profit for the period was higher at RM998 million, up 68% compared with RM595 million recorded in 1H2021. Earnings per share was at 70.05 sen, 70% higher compared with 41.17 sen in 1H2021.


DIVIDEND

PPB has declared an interim dividend of 12 sen per share for financial year ending 31 December 2022, payable on 28 September 2022 to shareholders whose names appear in the Record of Depositors on 9 September 2022.


REVIEW OF OPERATIONS

The results of PPB’s main business operations for 1H2022 are summarised as follows :-

  • Grains and Agribusiness segment revenue for 1H2022 increased by 31% to RM2.2 billion. The segment recorded a profit of RM115 million in 2Q2022 as compared to a loss of RM72 million recorded in 2Q2021; with that, the 1H2022 loss narrowed to RM23 million compared with RM52 million profit in 1H2021. The marked improvement in performance was attributable to hedging gains on derivative instruments as grain prices stabilised during the second quarter of 2022.
  • Consumer Products segment revenue and profit for 1H2022 were higher at RM378 million and RM13 million. The improved performance was mainly due to higher sales of bakery and other fast-moving consumer products.
  • Film Exhibition and Distribution segment revenue increased significantly to RM221 million compared with RM41 million in 1H2021 whilst the loss for 1H2022 reduced to RM8 million as compared with RM59 million loss recorded in 1H2021. The full reopening of cinemas, the opening of the newly acquired former MBO cinemas, higher admissions as well as a six-fold increase in box office collections, are the main factors which contributed positively to the overall performance of this segment.
  • Environmental Engineering and Utilities registered lower segment revenue and segment profit of RM68 million and RM1.2 million, down 28% and 71% respectively due to lower project revenue recognised and higher project cost incurred.
  • The Property segment revenue for 1H2022 was higher at RM82 million, up 56% whilst segment profit increased by >100% to RM22 million. The improvement was mainly attributable to new sales and progressive profit recognition of the Megah Rise development project, as well as improvement in overall mall business performance.


PROSPECTS

Grain commodity prices have now stabilized to a level closer to the pre-Russian-Ukraine conflict as global supply concerns eased. However, the flowthrough effect of high raw material prices on production costs, as well as high logistics costs will remain, given the lag effect of procurement and production cycles, in addition to limitations in our price-in mechanism. The Grains and agribusiness segment will continue its efforts to preserve margins by improving its product performance and enhancing its operational efficiency.

We expect our Consumer products segment, which mainly distributes basic necessities, to perform satisfactorily on the back of improving consumer sentiment as the country transitions into endemicity.

The Film exhibition and distribution segment saw strong quarter-to-quarter improvement due to the release of summer blockbuster titles. The scheduled movie line-up for the second half of 2022 is expected to contribute positively to the segment. Management will remain cautious in spending during this recovery stage of the industry and continue to optimise resources.

The Environmental engineering and utilities segment will continue to focus on replenishing its order book and exploring new project opportunities.

The Megah Rise development project is on schedule to be completed by the end of the 3rd quarter. Coupled with the increased footfall in our malls, performance of the Property segment is expected to be satisfactory.

Wilmar’s performance will continue to contribute substantially to the overall profitability of the Group.

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