Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 24): Boustead Holdings Bhd's second quarter net profit fell 92% from a year earlier as oil palm plantation and fuel-trading revenue declined. Higher minority interest also led to profit drop.

In a statement to the exchange today, Boustead (fundamental: 0.65; valuation: 2) said net profit fell to RM2.9 million in the second quarter ended June 30, 2015 (2QFY15) from RM34.6 million. Revenue was lower at RM2.21 billion versus RM2.59 billion.

1HFY15 net profit dropped to RM3 million from RM91 million a year earlier. Revenue was lower at RM4.1 billion compared with RM5.09 billion. Despite the weaker 2QFY15 financials, Boustead plans to pay a dividend of five sen a share for the quarter.

During 1HFY15, the company said its plantation unit registered lower average crude palm oil (CPO) price at RM2,206 a tonne against RM2,605 a year earlier. Oil palm fresh fruit bunch (FFB) output fell to 480,853 tonnes.

Meanwhile, Boustead's trading and industrial unit, which includes the group's petrol kiosk operations, reported a 36% revenue drop "mainly on decline in volume and fuel price". Boustead owns and runs the BHPetrol stations across Malaysia.

Boustead's diversified businesses include its pharmaceutical, real estate, and heavy industries divisions.

According to Boustead, pharmaceutical revenue fell 1% while real estate income rose 19%. The heavy industries segment, which includes ship repair, and oil and gas structures, registered a 14% revenue rise.

Looking ahead, Boustead said prospects for its plantation unit would depend on CPO prices and FFB output.

The company foresees lower CPO supply due to El Nino and higher CPO demand for biodiesel production.

"Malaysian exports are expected to benefit from the reduction in palm oil global supply originating from Indonesian government's new regulation of collecting levies on CPO exports and processed palm products.

"Additionally, the strengthening of soyoil prices and the weakening of ringgit has resulted in a wider CPO discount to soyoil which is likely to boost the demand for palm oil," Boustead said.

At 12.30pm, Boustead shares fell 23 sen or 5% to settle at RM4.17 for a market capitalisation of RM4.31 billion.

The stock had fallen 13% this year, underperforming the FBM KLCI's 12% decline.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

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