KUALA LUMPUR: Boustead Holdings Bhd's net profit for the first quarter ended March (1QFY15) plunged 99.8% to RM100,000 or 0.01 sen per share from RM56.4 million or 5.45 sen per share a year ago, on lower revenue.

Its profit attributable to sukuk holders, however, was at RM17.2 million, up 66.99% from RM10.3 million in 1QFY14, while net profit for non-controlling interests was at RM25.8 million, up 4.4% from RM24.7 million, its filing with Bursa Malaysia yesterday showed. The group’s 1QFY15 revenue was down 24.3% to RM1.89 billion from RM2.499 billion in 1QFY14.

The weaker financials notwithstanding, Boustead declared its first interim dividend of five sen per share in 1Q, payable on June 30, 2015.

In a statement, Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said: "This has indeed been a challenging period. External pressures and a general 'wait-and-see' mood in the consumer market is definitely bearing down on the group's earnings."

On a segmental basis, Boustead's plantation revenue registered an 80% slump in pre-tax profit and a 32.4% drop in revenue, which the group blamed on declining fresh fruit bunch (FFB) production (down 16%) and bearish palm product prices.

"This was largely due to weaker crude palm oil prices, which averaged at RM2,236 per tonne, a 15% drop from RM2,629 per tonne in the previous year's corresponding period,” the group said.

Its heavy industry division returned to the black in 1QFY15, after posting a pre-tax profit of RM3.6 million from a pre-tax loss of RM4.1 million, on better profit contribution from its joint-venture companies, Contraves Advanced Devices Group and BHIC AeroServices Sdn Bhd.

Boustead's finance and investment division, meanwhile, saw its pre-tax profit plunge 89.2% despite 20.8% revenue growth, mainly due to weaker contributions from Affin Holdings Bhd, which was impacted by higher allowance for loan impairment as a result of a one-off provisioning attributable to the commercial banking arm.

Going forward, Boustead expects this year to be a challenging one, in light of the global economic uncertainties and challenging market conditions, but noted that the diversified nature of its businesses in six segments would be beneficial in such times.

This article first appeared in The Edge Financial Daily, on May 26, 2015.