KUALA LUMPUR (Feb 28):  Boustead Holdings Bhd registered a net loss of RM455 million in the fourth quarter ended December 31, 2018 against a net profit of RM77.1 million in the prior year quarter, because of provisions and impairments in its heavy industries division and plantation losses. Other divisions also recorded lacklustre results.

Revenue for the quarter was stagnant at RM3.02 billion.

For the full year, it registered a net loss of RM469.2 million versus a net profit of RM690.14 million in FY17, while revenue was marginally lower at RM10.18 billion from RM10.23 billion a year earlier.

Boustead has warned 2019 would be another challenging year on both global and domestic fronts. Nevertheless, it said the group’s diversified nature in six core areas of the Malaysian economy augured well for it.

But it expects the plantation division's prospects for the coming year to be challenging. “However, the recognition of the gain on disposal of land in Seberang Perai Utara, upon completion, should boost earnings of the Division.”

Fresh fruit bunch (FFB) production for 2019 was projected to see some improvement from the slow production in 2018, supported by an expected increase in crops from existing operations and the Pertama Estates.

The proposed acquisition of more than 4,000 hectares of mature fields and a palm oil mill in Sandakan, Sabah, upon completion in the second quarter of 2019 will also contribute to the division's performance.

However, it expects production in Sarawak to remain weak given the operational difficulties.

During the fourth quarter, crude palm oil (CPO) was traded at between RM1,710 and RM2,150 per tonne. “The price is expected to climb towards RM2,400 per MT by the early part of 2nd quarter of 2019 in line with expected stocks drawdown.

“The biodiesel mandates of Indonesia, reduction of duty on crude and refined palm oil in India coupled with China’s positive outlook from the trade dispute with the US are some of the factors supporting CPO,” it said.

For the pharmaceutical segment, Boustead said it will continue its pursuit of boosting its market presence in the private sector via aggressive marketing initiatives with a parallel focus on enhancing operational efficiencies as well as ongoing containment measures, both in domestic and Indonesia operations.

It added the division will continue to focus on strengthening business synergies between its overseas subsidiaries, PT Millennium Pharmacon International TbK and PT Errita Pharma to tap into opportunities in Indonesia.

For the heavy industries segment, Boustead said the Littoral Combat Ship (LCS) and littoral mission ships (LMS) projects, as well as defence related maintenance, repair and overhaul activities, will contribute to the segment’s performance going forward.

Boustead fell one sen or 0.69% to close at RM1.45, giving it a market capitalisation of RM2.94 billion.