Oriental Holdings 3Q net profit up almost five-fold to RM69m amid lower revenue from auto, plastics biz

Oriental Holdings 3Q net profit up almost five-fold to RM69m amid lower revenue from auto, plastics biz
-A +A

KUALA LUMPUR (Nov 23): Conglomerate Oriental Holdings Bhd posted 358% growth in net profit for its third quarter ended Sept 30, 2021 (3QFY21) to RM68.66 million from RM14.99 million a year ago despite lower revenue, its bourse filing on Tuesday showed.

Earnings per share correspondingly grew by 357.44% to 11.07 sen from 2.42 sen.

Quarterly revenue, however, declined 25.32% to RM708.09 million from RM948.22 million a year prior.

The group also declared divisend of 10 sen per share for the quarter, up from six sen per share last year, bringing its cumulative dividend payout to 24 sen per share for FY21, unchanged from last year.

For its cumulative nine months ended Sept 30, 2021, the group's net profit grew 18 times to RM225.63 million from RM11.69 million, despite revenue declining by 0.5% to RM2.36 billion from RM2.37 billion last year.

"The decrease in revenue was mainly attributed to the lower contribution from the automotive segment with an overall decrease in the number of cars sold from retail operations," the filing stated.

"The group recorded an operating profit of RM417.7 million (2020: RM27.9 million), increasing by RM389.8 million, mainly attributed to the plantation segment," it added.

The group said its automotive segment, which was impacted by lockdowns in Malaysia and Singapore, will continue to contribute despite the competitive market conditions, and expects sales in 4QFY21 in Malaysia to gradually improve with the extension of the vehicle sales tax exemption to June 2022 but remains cautious about the shortage of semiconductor chips.

The plastic segment, which also reported a lower revenue after sales orders from automotive and electronic customers declined, will be improved via cost rationalisation, productivity improvement and source for new business ventures.

However, its plantation segment enjoyed higher earnings as the selling volume and prices of crude palm oil and palm kernel rose, coupled with favourable unrealised foreign exchange gain. Oriental Holdings said it will take necessary steps to ensure that all estates and mills remain efficient, cost effective and competitive while closely monitoring and managing the forex exposure of its JPY loans.

Its hotels and resorts segments also recovered as overall average room and occupancy rates have been gradually recovering especially in its hotels in Australia and the UK.

The group said that the relaxation of broad-based travel restrictions and reopening of the UK's borders to fully vaccinated travellers from the US and Europe in early August 2021 bring a promising outlook for the tourism sectors.

Likewise, its healthcare segment also staged a recovery as it treated more patients.

The group will focus on strengthening brand awareness and positioning its hospitals for sustainable growth as patient sentiments have gradually improved from the easing of lockdown restrictions.

Shares of Oriental Holdings traded three sen or 0.56% lower to close at RM5.32, giving the group a market capitalisation of RM3.3 billion.

Lam Jian Wyn