Friday 29 Mar 2024
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KUALA LUMPUR: Boustead Holdings Bhd’s net profit for its first quarter (1Q) ended March 31, 2009 fell 60% to RM60.8 million from RM152.3 million a year earlier on lower palm product prices, as revenue dropped 34% to RM1.22 billion from RM1.84 billion.

Basic earnings per share fell to 9.34 sen versus 24.21 sen a year earlier. At pre-tax level, Boustead said its profit of RM86 million was an improvement over the preceding quarter’s profit of RM20 million.

Boustead declared a dividend of 10%, or five sen per share, less tax to be paid on July 20. Boustead expects performance from the plantation division to be better for the rest of the year given the recent gains in crude palm oil (CPO) prices.

It also expected the heavy industries division to post satisfactory earnings from vessel construction and other shipbuilding activities. The division would also deliver Patrol Vessel 3 to the Navy by the end of this month.

“In addition, the division is targeting to deliver several vessels during the financial year which include chemical tankers and anchor handling tug support vessels,” it said.

Its property division would be driven by ongoing developments at Mutiara Damansara and its Rini townships, while its investment properties and hotels were expected to see good earnings due to its strategic locations.

In a statement, Boustead’s group managing director Tan Sri Lodin Wok Kamarruddin remained optimistic that the firm would be able to ride out the bleak economic conditions.

“Our inherent potential lies in our core divisions, and we are doubling our efforts to maintain organic growth.
“This will certainly not be easy given the current market conditions and sentiments. Nevertheless, we have an obligation to our shareholders and we intend to fulfil this. Hence, the payment of dividends for the first quarter of this financial year,” Lodin said.

He also said it was crucial for the group to remain profitable and ensuring that its cash flow remained positive.
In 1Q, the plantation arm contributed a pre-tax profit of RM23.7 million compared with RM104.1 million a year earlier. It achieved an average CPO price of RM1,886 a tonne against last year’s average of RM3,029 a tonne. Cumulative fresh fruit bunches crop which amounted to 300,805 tonnes was 3% lower.

Its heavy industries arm contributed 36% or RM30.9 million to the company’s bottom line.

“Current quarter’s result is lower than last year’s due to slower progress billings and higher costs,” it said. However, the division made a turnaround compared with 4Q08 on improvement in contribution from its vessel construction.

Its property business posted a pre-tax profit of RM17.9 million, 14% lower than last year, Boustead said, adding that its hotel and retail mall operations had reported improved earnings on a 20% increase in revenue despite a decline in earnings from its property development operations.

For its finance and investment division, pre-tax profit was 65% lower at RM4.2 million compared with RM11.9 million a year earlier, mainly due to increase in funding cost on investments.

Its insurance arm BH Insurance (M) Bhd posted a lower pre-tax profit of RM6.7 million compared with RM7.6 million previously while Affin Group’s pre-tax earnings fell to RM120.3 million from RM124.4 million on lower operating income, which was substantially offset by the higher net interest income, and lower overhead expenses and impairment loss on securities.

The trading division’s pre-tax profit was 86% lower at RM3.2 million from RM22.8 million previously. Boustead closed two sen lower at RM3.54 with 332,200 shares traded on May 18.

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