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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.

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