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PPB net profit falls 24.6% from Covid-19 complications

29 May 2020 / 18:45 H.

PETALING JAYA: PPB Group Bhd’s net profit fell 24.6% to RM187.27 million in its first quarter ended March 31, 2020 compared to RM248.45 million reported in the same quarter of the previous year due to the loss reported by its film exhibition and distribution, property and consumer products segments and a 14% lower contribution of RM165 million from Wilmar International Ltd.

Revenue for the quarter fell 7.6% to RM1.07 billion from RM1.16 billion reported previously.

The quarter saw its grains and agribusiness segment decline 9% in profit to RM54 million against RM60 reported previously due to weaker contribution from the Indonesia flour mills, and lower selling prices for livestock.

Its consumer products segment reported a loss of RM26,000 compared to a profit of RM1.7 million previously mainly due to lower sales of in-house products.

Meanwhile, PPB’s film exhibition and distribution segment saw a loss of RM19 million for Q1’20 against a RM18 profit in Q1’19 due to lower box office collection and cinema admission due the closure of cinemas and deferment of movie titles due to the Covid-19 pandemic.

Its environmental engineering and utilities segment saw a lower profit of RM2 million due to lower contribution from ongoing projects and reduction in operational capacity from the movement control order.

The group’s property segment recorded a loss of RM2.5 million compared to a profit of RM2.8 million reported previously, mainly attributable to lower rental income and lower contributions from associates.

In regards to its future prospects, PPB acknowledged that the global and Malaysian economic outlook for 2020 will be significantly impacted by the pandemic as strict measures to contain the spread of the pandemic, will weigh considerably on both external demand and domestic growth.

It stated that the Malaysian economy is expected to contract in the second quarter of the year and as the movement control order is lifted, the economic activity is expected to gradually improve in H2’20.

In line with the projected improvement in global growth, the Malaysian economy is expected to register a positive recovery in 2021.

On the back of a challenging operating environment which will affect the film exhibition and distribution and property segments, the group’s other main business segments are expected to perform satisfactorily.

In addition, Wilmar’s performance will continue to contribute substantially to the overall profitability of PPB.

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