Higher operating costs hit Boustead Holdings Q2 results

PETALING JAYA: Boustead Holdings Bhd’s net profit plunged 73.7% to RM59.3 million for the second quarter ended June 30, 2017 against RM225.8 million in the previous corresponding period, due to higher operating costs.

Revenue, however, rose 15.3% from RM2.07 billion to RM2.39 billion.
The group has proposed an interim dividend of three sen per share for the quarter under review.

Boustead’s six-month net profit plummeted 68.9% from RM204.3 million to RM63.5 million on the back of a 21.3% rise in revenue from RM3.93 billion to RM4.76 billion.

The group said in a filing with the stock exchange that for the half-year, the plantation division registered a lower pre-tax profit of RM85.9 million compared with RM151.2 million in the same period a year ago due to the absence of plantation land disposal gain.

The average selling price of crude palm oil for the first six months was RM2,969 per tonne, up by RM545 or 22% from RM2,424 in last year’s corresponding period.

The heavy industries division registered a pre-tax profit of RM45.9 million, marking an improvement from the deficit of RM99.6 million in the previous year’s corresponding period, thanks to improved contribution from Boustead Naval Shipyard.

The finance and investment division closed the half-year period with a higher pre-tax profit of RM40.5 million versus RM24.6 million in the same period last year.

The pharmaceutical division recorded a lower pre-tax profit of RM28.7 million versus RM37.9 million, while the property division recorded a deficit of RM15 million against a pre-tax profit of RM212.2 million in last year’s corresponding period.

Looking ahead, Boustead expects its six core business areas to benefit from the positive long-term prospects for the Malaysian economy, which is supported by strong economic fundamentals, a sound financial system, an accommodative monetary policy as well as the implementation of various government initiatives.

Boustead Holdings shares closed unchanged at RM2.70 yesterday, with 188,600 traded, giving it a market capitalisation of RM5.47 billion.