CBIP 1Q profit drops 5.53% due to losses in associates

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KUALA LUMPUR (May 28): CB industrial Product Bhd’s (CBIP) net profit dropped 5.5% to RM22 million, or 4.14 sen per share, for the first quarter ended March 31 (1QFY15) against RM23.29 million, or 8.78 sen per share, due to share of losses by the associates and joint venture (JV).

“The decrease in profit before tax was mainly due to share of losses by the associates and JV. The Associates and JV posted a loss of RM1.7 million as compared to a profit of RM2 million for the same period last year.

“The losses by the associates and JV were mainly due to decline in production and lower prices of palm products,” CBIP said in a filing to Bursa Malaysia today.

Similarly, CBIP (fundamental: 2.7; valuation: 1.8)’s 1QFY15 revenue also contracted 2.8% to RM117.65 million against RM121.04 million last year, mainly due to lower project billing by the special purposes vehicles (SPV) segment, down by 41% as compared to the same period last year.

However, the group’s palm oil mill equipment segment reported higher revenue and profit before taxation by 10% and respectively as compared to the same period last year. The increase in profit was mainly due to improvement in project completion and billing.

Moving forward, CBIP expected the operating environment to be challenging.

“In view of the progress in the implementation of the projects secured in hand and the current challenging environment, the board expects the group to achieve satisfactory results driven by the palm oil mill equipment and SPV for the financial year ending Dec 31, 2015.”

CBIP share price closed unchanged at RM2.03, giving it a market capitalisation of RM1.08 billion.

(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.)