Friday 29 Mar 2024
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SEPANG: Brahim’s Holdings Bhd (fundamental: 0.8; valuation: 1.8) is confident it will continue its 25-year in-flight catering concession with the new company that has been established to replace Malaysian Airline System Bhd (MAS), namely Malaysia Airline Bhd (MAB).

“The [negotiation] process is still ongoing. I think we will be able to conclude it soon,” Brahim’s executive chairman Datuk Ibrahim Ahmad Badawi told newsmen after the launch of the group’s new commercial dishwasher yesterday.

It was reported last year that the company was renegotiating its RM6.25 billion in-flight catering contract with Khazanah Nasional Bhd. Ibrahim said Brahim’s should be able to retain the 25-year concession but stressed that the renegotiation of its contract is not finalised yet at this juncture.

When asked about what other measures the group is taking to be less reliant on the national carrier — other than the group’s recent acquisition of the Burger King franchise in Malaysia and Singapore — Ibrahim said the group is in discussions to bring in British Airways plc, the Emirates Lounge, and two other airlines to expand its customer base. However, he declined to disclose more on the details of the discussions.

“We are currently supplying to 37 airlines and we will look for more, not only for in-flight meal business, but also for other F&B (food and beverage) businesses,” he said.

Ibrahim said the group is also looking for more merger and acquisition targets, and is especially interested in the F&B sector.

“Since we already have the talent and facilities [for F&B] now, it will be easier for us to venture into something similar,” he explained.

As for the company’s financial performance for the fiscal year ended Dec 31, 2014, Ibrahim admitted that the upcoming audited results will reflect the direct impact from the group’s delisted partner, MAS. “It is predictable that the marketplace is going to be challenging moving forward,” he said.

The company’s latest quarter financial report to Bursa Malaysia ended Sep 30, 2014 showed a net profit of RM1.01 million, down 84.4% from RM6.5 million a year ago, with revenue at RM89.69 million, down 10.4% from RM100.08 million. Brahim’s closed six sen or 4.72% higher to RM1.33 yesterday, giving it a market capitalisation of RM300.08 million.

 

This article first appeared in The Edge Financial Daily, on January 21, 2015.

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