Boustead Registers Stable Profits
KUALA LUMPUR, August 22, 2012 – Boustead Holdings Berhad (Boustead) recorded a profit after tax of RM56 million for the second quarter ended 30 June 2012 compared with RM189 million for the first quarter of its current financial year. The results were strongly influenced by lower crude palm oil prices and a slowdown in the maritime sector which impacted the Heavy Industries Division.
The Group’s profit before tax for the quarter under review was RM80 million compared with RM251 million for the same period last year. Cumulatively for the six month period, a profit after tax of RM245 million was achieved compared with RM358 million for the corresponding period last year. The drop in profit was due to a gain of RM95 million in the previous year resulting from the disposal of plantation assets. For the six month period under review, Boustead recorded a significantly improved turnover of RM5 billion compared with RM3.8 billion for the same period last year.
For the half-year period, earnings per share (EPS) was 18.2 sen compared with 28.8 sen for the corresponding period last year, The Group’s net asset per share was RM4.39 as at June 30, 2012 (31 Dec 2011: RM4.30).
Despite lower earnings for the period under review, the Group remains dedicated to its dividend policy and delivering value to shareholders. In line with this commitment, the Board of Directors has declared a dividend of 7.5 sen for the period under review. This brings the total dividends for the year to date to 15 sen.
YBhg Tan Sri Dato’ Seri Lodin Wok Kamaruddin, Deputy Chairman/Group Managing Director, Boustead Holdings Berhad said, “For the six month period the Group was weighed down by commodity prices and the tough conditions of the maritime sector which impacted our Heavy Industries Division. Fortunately, the remaining four Divisions have performed significantly well for the six month period on a comparative year on year basis.”
“Our focus now is to ensure improvements in productivity and efficiencies. Business is prone to cyclical conditions and given our success as a conglomerate we are able to deliver profit as a result of multiple revenue streams, hence we should not be severely affected by dips in any one business stream given that the other streams should assist the Group in delivering profits.”
The Plantation Division was severely impacted for the six month period registering a profit of RM112 million compared with RM173 million for the same period last year. The results were impacted by commodity prices and a decline in crop production. Furthermore unstable weather conditions and sluggish demand impacted CPO prices. For the six month period the average palm oil price was RM3,168 per MT, an 8% drop compared with last year’s corresponding period’s average of RM3,441 per MT.
The Pharmaceutical Division delivered a strong profit of RM55 million for the first half of the year compared with RM36 million for the same period last year, representing a 52% jump in profit. Profits were driven by Pharmaniaga Berhad which saw higher sales volume to its Government clients coupled with improvements in operational efficiencies in both its domestic and overseas businesses.
The Property Division reported a profit of RM56 million for the six month period compared with RM36 million for the same period last year. Representing a 56% growth in profit, the gains were attributable to the disposal of a vacant land during the first quarter of this financial year.
Cumulatively, the Finance and Investment Division delivered a profit of RM50 million for the six month period compared with RM25 million for the corresponding period last year. This represents a strong 50% increase driven by strong contributions from the Affin Group and improved results generated by Cadbury Confectionery and the University of Nottingham in Malaysia.
Meanwhile the Heavy Industries Division posted a deficit of RM31 million for the cumulative period mainly due to losses from the commercial shipbuilding operations brought about by cost escalations. The maintenance, repair and overhaul businesses also experienced depressed conditions coupled with a slowdown in the chartering business. The second generation patrol vessels project had a slow start during the period under review.
The Trading and Manufacturing Division’s contribution to the Group’s profitability for the first six months of the year was RM63 million compared with RM56 million last year. The key drivers were BHPetrol’s improved earnings and a gain of RM14 million via a property sale which offset a drop in stockholding gains for the period under review.
“The Boustead Group has seen significant and consistent profit growth over the last several quarters and over the last few financial years. Though our results for this quarter have been subdued, we will shoulder on and do our utmost to work hard despite the impact of global conditions on Malaysian shores,” concluded YBhg Tan Sri Dato’ Seri Lodin.
Since its inception as a modest trading entity more than 180 years ago, the Boustead Group has grown by leaps and bounds to comprise more than 90 subsidiary and associate companies, and has substantial interests in various sectors of the Malaysian economy. The Boustead Group's operations are focused in six key areas; plantation, heavy industries, property, finance & investment, trading & manufacturing and pharmaceutical. As at 31 June 2012, Boustead Holdings Berhad’s paid-up capital was RM517 million while its shareholders’ funds stood at RM4.5 billion. Market capitalisation is currently in excess of RM5.5 billion
Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Boustead Holdings Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.
on behalf of: Boustead Holdings Berhad
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