FINANCIAL HIGHLIGHTS FOR 1H2018

• PPB Group revenue increased by 7% to RM2.23 billion in 1H2018. The increase was attributed to higher revenue from the Grains & Agribusiness and Environmental Engineering & Utilities
• Group pre-tax profit of RM546 million was 14% higher compared with RM480 million for 1H2017, mainly due to higher contribution from Wilmar International Limited, and higher profits from the Grains & Agribusiness and Environmental Engineering & Utilities
• Net profit for the period was higher at RM494 million, up 14% compared with RM432 million recorded in 1H2017. Earnings per share was at 34.72 sen, 14% higher compared with 1H2017 of 30.34 sen.

DIVIDEND

PPB has declared an interim single tier dividend of 8 sen per share for the financial year ending 31 December 2018 payable on 4 October 2018 to shareholders whose names appear in the Record of Depositors on 18 September 2018.

REVIEW OF OPERATIONS

The results of PPB’s main business operations for 1H2018 are summarised as follows :- 

• Grains & Agribusiness segment’s revenue for 1H2018 increased by 6% to RM1.54 billion mainly attributable to higher sales volume from all flour mills. Segment profit increased by 30% to RM73 million mainly due to lower raw material costs and improved product margins from feed division. 

• Consumer Products segment revenue for 1H2018 was RM333 million, down 3% from 1H2017 mainly due to lower sales of in-house products. Segment profit decreased by 46% to RM10 million for 1H2018 mainly due to the absence of a  one-time gain on sale of land and building amounting to RM8.0 million in the 1H2017 and weaker performance by the bakery division. 

• Film Exhibition & Distribution segment revenue was relatively stable at RM249 million. However, segment profit decreased by 28% at RM26 million mainly due to the losses from the film distribution business as movie titles released were weaker than last year. 

• The Environmental Engineering & Utilities segment revenue increased twofold to RM93 million mainly contributed by progressive billings for the construction of projects secured in the 2H2017. In line with the segment revenue, segment profit was higher at RM7.2 million for 1H2018. 

• The Property segment revenue increased by 8% to RM23 million primarily driven by higher project management fee income. Segment profit was at RM4.4 million as the one-time gain on the sale of vacant land was offset by higher operating cost.

CAPITAL COMMITMENTS

Total capital commitments as at 30 June 2018 amounted to RM581 million as follows :-

PROSPECTS FOR 2018

The flour markets in Malaysia, Indonesia and Vietnam and the feed market in Malaysia are expected to remain challenging amidst volatility in commodity prices.  Notwithstanding the market uncertainty, the Grains & Agribusiness segment is expected to perform satisfactorily with stable demand in the 2H2018, coupled by continuous efforts to strive for cost efficiency and focus on product quality.  The Consumer Products segment is expected to remain stable with more promotional activities and campaigns planned for the 2H2018.  The Film Exhibition & Distribution segment is expected to be supported by a strong movie line-up and contribution from newly opened cinemas in Malaysia.  In line with the construction progress of contracts in hand, the Environmental Engineering & Utilities segment is expected to perform better in the 2H2018.  With encouraging sales of the Megah Rise project in Petaling Jaya and improved tenancy from the extended and refurbished Cheras LeisureMall operations, the Property segment is expected to perform satisfactorily.

PPB Group’s main business segments are expected to perform satisfactorily in FY2018.  The overall Group financial results will continue to be supported by the business performance of Wilmar.