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Thursday, 02 September 2021

PPB Group achieved 9% increase in revenue whilst pre-tax profit remained unchanged at RM591 million for 1H2021

FINANCIAL HIGHLIGHTS FOR 1H2021

  • PPB Group revenue increased by 9% to RM2.2 billion in 1H2021 mainly due to higher revenue from the Grains and Agribusiness segment.
  • Group pre-tax profit remained stable at RM591 million. The weaker performance recorded by the Group’s core segments was mitigated by the increase in profit contribution from its 18.6% associate, Wilmar International Limited (Wilmar).  Wilmar’s profit contribution was RM594 million, up 33% compared with 1H2020.
  • Profit for the period was higher at RM586 million, up 13% compared with RM520 million recorded in 1H2020.  Earnings per share was at 41.17 sen, 13% higher compared with 1H2020 of 36.55 sen.

DIVIDEND
PPB has declared an interim dividend of 10 sen per share for the financial year ending 31 December 2021 payable on 28 September 2021 to shareholders whose names appear in the Record of Depositors on 10 September 2021.

REVIEW OF OPERATIONS
The results of PPB’s main business operations for 1H2021 are summarised as follows :-

  • Grains and Agribusiness segment revenue for 1H2021 increased by 9% to RM1.7 billion whilst segment profit was lower at RM52 million compared with RM181 million in 1H2020. The sharp rise in commodity prices led to a significant increase in raw material costs of flour and feed products; and with limited price-in mechanism, gross profit margin compression was seen across the sub-segments.
  • Consumer Products segment revenue for 1H2021 remained stable at RM320 million. Segment profit was significantly lower at RM0.4 million for 1H2021 compared with RM20.1 million recorded for the 1H2020 mainly due to the one-off gain of RM10 million on the step-acquisition of an associate in 1H2020, in addition to the increased cost of goods sold on the back of the rising commodity prices.
  • Film Exhibition and Distribution segment revenue declined significantly by 48% to RM41 million and recorded segment loss of RM59 million, a decline of 3% from 1H2020. The performance of this segment was significantly impacted by the prolonged closure of cinemas during the Movement Control Order (“MCO”).
  • Environmental Engineering and Utilities registered higher segment revenue at RM94 million, up 63% whilst segment profit decreased by 39% to RM4 million as operations were impacted by the lockdown and reduced operation capacity with the MCO in place during most of 1H2021.
  • The Property segment revenue and segment profit increased by >100% to RM53 million and RM6 million respectively. This was mainly attributable to higher revenue recognised from the development of the Megah Rise project.

PROSPECTS
Global agricultural commodity prices have risen substantially this year, particularly for food commodities. It is expected that the food commodity prices will remain highly volatile given the potential disruption of supply in major producing countries affected by poor weather and rising demand of the grains as more countries' economies start to reopen.

Performance of the Grains and agribusiness segment has been adversely impacted by the spike in commodity prices, particularly in the second quarter of this year. Gross profit margin compression was seen across various sub-segments of this segment. Management will continue to navigate the challenging situation in dealing with a highly volatile commodity market. Riding on the Group’s experience in both the commercial and technical aspects, the Grains and agribusiness segment aims to deliver an improved set of results for the following quarters.

The Consumer products segment is expected to perform satisfactorily as it continues to expand its market place through the food services channel and e-commerce platform.

The acceleration of the National Immunization Program (NIP) and the subsequent lifting of restrictions will be key for the recovery of the Film exhibition and distribution segment. During this transition period of the NIP, management will continue its efforts to expand online business initiatives pending the reopening of its enlarged cinema chain with the newly acquired cinema assets of the former MBO cinema circuit. Stringent cost control remains as our top priority to improve operating cash flow and financial performance.

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

Performance of the Property segment continued to be impacted by the ongoing Movement Control Order.  Management remains steadfast in working on various initiatives to improve footfall in its malls and completing the development of the Megah Rise project.

The Covid-19 pandemic will continue to weigh down on the Film exhibition and distribution and Property segments. The Grains and agribusiness segment, which is in the production and distribution of staple food and services, is expected to ride through the challenging operating environment and to deliver a satisfactory set of results for the rest of the year. Wilmar's performance will continue to contribute substantially to the overall profitability of the Group.

 

Contact :-
Ms Koh Mei Lee, Head of Corporate Affairs of PPB Group Berhad
Telephone : 012-2062831
Email : This email address is being protected from spambots. You need JavaScript enabled to view it.

Thursday, 04 March 2021

PPB GROUP ACHIEVED RM1.42 BILLION PRE-TAX PROFIT IN 2020 AND RECOMMENDS FINAL AND SPECIAL DIVIDENDS

FINANCIAL HIGHLIGHTS OF FY2020

  • PPB Group revenue declined by 11% to RM4.19 billion in FY2020 (FY2019 : RM4.68 billion) mainly attributed to lower revenue from Film exhibition and distribution
  • Group pre-tax profit of RM1.42 billion was 12% higher than FY2019 of RM1.27 billion mainly due to higher profit contribution from our 18.6% associate, Wilmar International Limited (Wilmar) which contributed RM1.24 billion for FY2020 (FY2019 : RM960 million). Core group profit was, however, lower by 43%.
  • Profit after tax for FY2020 was RM1.36 billion and earnings per share was 92.57 sen.

PROPOSED SPECIAL AND FINAL DIVIDENDS TOTALING 38 SEN PER SHARE
PPB’s Board has recommended a final dividend of 22 sen per share and a special dividend of 16 sen per share for FY2020 subject to approval by PPB shareholders at the 52nd Annual General Meeting to be held on 11 May 2021.  The final and special dividends are payable on 1 June 2021 to shareholders whose names appear in the Record of Depositors on 17 May 2021.

Together with the interim dividend of 8 sen per share, the total dividend paid and payable for FY2020 would be 46 sen per share (FY2019 : 31 sen per share).

REVIEW OF OPERATIONS
The results of PPB’s business operations for 2020 are summarised as follows :-

  • Revenue from the Grains and agribusiness segment was relatively unchanged at RM3.29 billion (FY2019 : RM3.3 billion).  Segment profit increased by 28% to RM272 million (FY2019 : RM213 million) mainly attributable to lower raw material costs and higher share of profits from its associates.
  • Consumer products segment revenue remained unchanged at RM628 million (FY2019 : RM627 million).  Segment profit was higher at RM32 million (FY2019 : RM647,000) due mainly to a one-off gain on step-acquisition of an associate of RM21 million and better performance at the bakery division.
  • Segment results of Film Exhibition and Distribution were significantly impacted by reduced admissions, intermittent closure of cinemas and deferment of movie titles during the year as the country fought the Covid-19 pandemic through the Movement Control Order (“MCO”).  Film Exhibition and Distribution segment incurred a loss of RM136 million for FY2020 (FY2019 : RM67 million profit).
  • Environmental engineering and utilities segment revenue was lower by 3% at RM190 million (FY2019 : RM195 million).  Profit was higher by 28% at RM14 million (FY2019 : RM11 million) mainly attributable to share of profit from joint venture as a one-time impairment of an overseas joint venture of RM8.9 million was made in FY2019.  Excluding that, performance was also affected by slower project activities due to the imposition of MCO during the year.
  • Property segment recorded revenue and profit of RM67 million (FY2019 : RM65 million) and RM4 million (FY2019 : RM14 million) respectively due to lower rental income and the absence of a one-time gain on disposal of property of RM4.7 million in FY2019.

PROPOSED ACQUISITION OF CINEMA ASSETS
On 23 February 2021, Golden Screen Cinemas Sdn Bhd (GSC) signed an Asset Sale Agreement to acquire the majority of cinema assets from MCAT Box Office Sdn Bhd and Reel Entertainment Holdings Sdn Bhd (both in creditors’ voluntary winding up), operators of the former MBO cinema circuit.  The acquisition is expected to complete by end of June 2021.

This strategic acquisition will help accelerate growth and strengthen the market leadership position of GSC moving forward.

PROSPECTS FOR 2021
The Grains and agribusiness segment is expected to weather the volatile commodities market. The segment, which is in the business of production and distribution of staple food, is expected to perform satisfactorily, riding on its strong technical competency, extensive marketing and distribution network as well as in-depth procurement experience.

The Consumer Products segment is expected to perform satisfactorily as the Group endeavours to expand sales into the food service channel and e-commerce marketplace.  

The Film exhibition and distribution segment performance will be weighed down by intermittent cinema closures, operating in reduced seating capacity due to strict adherence to maintaining social distancing, and deferment of movie titles releases.  Management is confident that the movie industry will start to recover as the Covid-19 cases are brought under control and after the planned rollout of the vaccination programme in February 2021. We remain resilient during this transitory period and continue to work on revenue diversification and cost optimisation initiatives, in addition to stringent cash flow management.

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

Performance of the Property segment remains challenging, both in the area of investment properties and property development. Management will continue to work on various initiatives to improve footfall in our malls as well as to increase sales of our development properties.

The Covid-19 pandemic will continue to weigh on our Film exhibition and distribution and Property segments. The other main business segments, which are mainly in the production and distribution of staple food and services, are expected to perform satisfactorily. Wilmar's performance will continue to contribute substantially to the overall profitability of the Group.

 

Contact :-
Ms Koh Mei Lee, Head of Corporate Affairs of PPB Group Berhad
Telephone : 012-2062831
Email : This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

Friday, 04 September 2020

PPB Group achieved higher pre-tax profit of RM591 million, up 28% compared with 1H2019

FINANCIAL HIGHLIGHTS FOR 1H2020

  • PPB Group revenue decreased by 12% to RM2.02 billion in 1H2020 as lower revenue was recorded by all core group segments.
  • Group pre-tax profit increased by 28% to RM591 million compared with RM461 million for 1H2019, mainly attributable to higher contribution from Wilmar International Limited at RM447 million compared with RM310 million recorded in 1H2019. Core group profit was however, lower by 4.8%.
  • Profit for the period was higher at RM552 million, up 29% compared with RM428 million recorded in 1H2019.  Earnings per share was at 36.5 sen, 27% higher compared with 1H2019 of 28.7 sen.

DIVIDEND
PPB has declared an interim dividend of 8 sen per share for the financial year ending 31 December 2020 payable on 29 September 2020 to shareholders whose names appear in the Record of Depositors on 11 September 2020.

REVIEW OF OPERATIONS
The results of PPB’s main business operations for 1H2020 are summarised as follows :-

  • Grains & Agribusiness segment revenue for 1H2020 decreased by 3% to RM1.59 billion due to lower sales volume of flour and feed. Segment profit increased to RM181 million compared with RM85 million in 1H2019 mainly attributable to higher efficiency and better management of raw material costs.
  • Consumer Products revenue for 1H2020 remained stable at RM326 million. Segment profit improved to RM10 million for 1H2020 compared with RM3 million in 1H2019 mainly due to improved performance at the bakery division.
  • Film Exhibition & Distribution revenue declined significantly by 71% to RM80 million and recorded a loss of RM61 million compared with a profit of RM39 million in 1H2019. The performance of this segment was significantly impacted by the closure of the cinemas during the Movement Control Order (“MCO”) period up to 30 June 2020.
  • Environmental Engineering & Utilities registered lower revenue of RM58 million, down 18% due to work delay during the MCO period. Segment profit remained stable at RM7 million.
  • Property segment revenue decreased by 23% to RM22 million. The segment recorded a loss of RM4 million compared to a RM11 million profit previously, mainly attributable to lower mall-related rental income during the MCO period.

PROSPECTS FOR 2020

The Grains and Agribusiness segment weathered a challenging operating environment, with volatility in grain prices and foreign exchange market. Given this segment is in the production and distribution of essential food products, it has not been significantly impacted by the Covid-19 pandemic and is expected to perform satisfactorily in the second half of 2020.

The Consumer Products segment endeavours to maintain the momentum of sales by focusing on food services and other channels via the e-commerce marketplace. The segment is expected to perform satisfactorily in 2H2020.

The Film Exhibition and Distribution segment continues to be affected by the Covid-19 pandemic as most movie title releases were deferred to 2021.  Management will continue to implement cost optimisation measures and stringent cash flow management to deal with the current operating environment.

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

Performance of the Property segment also remains challenging, both in investment properties and property development. Various measures are being taken to address the reduced footfall in our malls as well as slower sales of properties.

The Covid-19 pandemic continues to weigh on our Film Exhibition and Distribution and Property segments; the other main business segments, which are mainly in the production and distribution of essential products and services, are expected to perform satisfactorily. Wilmar's performance will continue to contribute substantially to the overall profitability of the Group.

Friday, 28 February 2020

PPB GROUP ACHIEVED RM1.27 BILLION PRE-TAX PROFIT FOR YEAR 2019 AND RECOMMENDS HIGHER DIVIDENDS

FINANCIAL HIGHLIGHTS OF YEAR 2019

  • PPB Group revenue rose 3% to RM4.68 billion in FY2019 (FY2018 : RM4.53 billion) mainly attributed to higher revenue recorded from Grains and agribusiness; Film exhibition and distribution; and Property segments.
  • Group pre-tax profit of RM1.27 billion was 9% higher than FY2018 of RM1.17 billion mainly due to higher profit contribution from our 18.5% associate, Wilmar International Limited (Wilmar) which contributed RM960 million for FY2019 (FY2018 : RM837 million); and higher profits from Grains and agribusiness
  • Profit after tax for FY2019 was RM1.2 billion and earnings per share was 81.02 sen.

DIVIDEND
PPB’s Board has recommended a final dividend of 23 sen per share for FY2019 subject to approval by PPB shareholders at the 51st Annual General Meeting to be held on 14 May 2020.  The final dividend is payable on 2 June 2020 to shareholders whose names appear in the Record of Depositors on 18 May 2020.

Together with the interim dividend of 8 sen per share, the total dividend paid and payable for FY2019 would be 31 sen per share (FY2018 : 28 sen per share).

REVIEW OF OPERATIONS
The results of PPB’s business operations for 2019 are summarised as follows :-

  • Revenue from the Grains and agribusiness segment was up by 5% to RM3.3 billion (FY2018 : RM3.15 billion) mainly attributable to higher flour prices. Segment profit increased by 17% to RM213 million (FY2018 : RM183 million) mainly due to higher flour prices, partially offset by higher raw material costs.
  • Consumer products segment revenue was lower by 2% at RM 627 million (FY2018 : RM641 million). Segment profit was lower at RM647,000 (FY2018 : RM7 million) due mainly to lower sales of in-house products and higher operating costs at the bakery division.
  • Revenue from the Film exhibition and distribution segment rose by 2% to RM556 million (FY2018 : RM545 million) whilst segment profit maintained at RM67 million in (FY2018 : RM67 million). The higher revenue was driven by improved F&B sales and advertising income.  Despite higher revenue, profit was offset by higher operating costs.
  • Environmental engineering and utilities segment revenue and profit were at RM195 million (FY2018 : RM205 million) and RM11 million (FY2018 : RM21 million) respectively. The lower profit was mainly due to one-off impairment of an overseas joint venture.
  • Property segment revenue went up by 14% to RM65 million (FY2018 : RM57 million) whilst segment profit was lower by 57% to RM14 million (FY2018 : RM32 million). The decline in segment profit was mainly attributable to the lower share of profit from an associate.

PROSPECTS FOR 2020
Grains and agribusiness segment is expected to perform satisfactorily supported by our well established market position and technical strength in maintaining good and consistent quality products, riding also on the fact that demand for essential basic food products will remain resilient in any economic environment, despite volatile grains commodity and foreign exchange market conditions.  The Consumer products segment is expected to be stable with support of new agency products.  While the Film exhibition and distribution segment is expected to be impacted by disruptions from the Covid-19 outbreak in the first quarter of the year, this segment is well positioned to maintain its market leadership with the full year performance of new cinemas opened in 2019 and strong lineup of new titles.  The Environmental engineering and utility segment will continue to focus on replenishing its order book and exploring new project opportunities.  The Property segment will continue to execute its existing projects and improve yield of its existing investment properties.

While the overall Group financial results depend substantially on Wilmar's business performance, the Group’s main business segments are expected to perform satisfactorily in financial year 2020.

 

Contact :-
Ms Koh Mei Lee, Head of Corporate Affairs of PPB Group Berhad
Telephone : 03-27260088
Email : This email address is being protected from spambots. You need JavaScript enabled to view it.

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