Oriental Holdings returns to the black with net profit of RM122m in 1Q, declares 14 sen dividend

Oriental Holdings returns to the black with net profit of RM122m in 1Q, declares 14 sen dividend
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KUALA LUMPUR (May 28): Oriental Holdings Bhd swung back to profitability with a net profit of RM122.05 million in the first quarter ended March 31, 2021 (1QFY21), against a net loss of RM81.77 million a year earlier, on better performance by its plantation segment as well as share of profits from associates.

The group posted earnings per share of 19.67 sen, compared to losses per share of 13.18 sen for 1QFY20.

Revenue, however, dropped 6.91% to RM890.3 million, from RM956.39 billion previously, dragged by lower contribution from the automotive segment with lower number of cars sold, but cushioned by higher contribution from the plantation segment with overall increase in sales commodities volume and selling prices.

The group proposed a final dividend of eight sen per share and a special dividend of six sen per share, payable on July 15.

For the automotive segment, the group said that with the reinstatement of MCO 2.0 and 3.0 in mid-January and May 2021 respectively, second quarter sales from retail operations in Malaysia are not expected to be encouraging despite the vehicle sales tax exemption period being extended to June.

It cautioned that the effect will be minimal and dampened further by a shortage of semiconductor chips in the supply chain which will inevitably cause delays in production in the near future.

The plantation segment, the group said, will take necessary steps to ensure that all estates and mills remain efficient, cost effective and competitive. Currently, Oriental Holdings has four oil mills with the fourth oil mill commencing in early November 2020.

The group said the plastic segment continues to face competition from other domestic industry players and will be impacted by disruptions in the global supply chain and limited growth in the local automotive industry. Hence, management will continue to exercise cost rationalisation, productivity improvement and source for new business ventures to improve the performance of the segment.

The healthcare segment saw a sharp decline in patient admissions following the MCO.

Oriental Holdings said its hotels and resorts segment has been affected by the lockdowns across the world. It said its hotel in the United Kingdom has been closed for business since April 2020.

Shares in Oriental Holdings closed unchanged at RM5.18, valuing the group at RM3.21 billion. The counter saw 702,700 shares traded.

S Kanagaraju