KUALA LUMPUR (May 19): PPB Group Bhd managing director Lim Soon Huat said the scale and duration of Covid-19-driven uncertainties cannot be determined at this juncture, and such environment could impact the group’s earnings, cash flow and financial condition.

In PPB’s latest annual report, which was filed with Bursa Malaysia today, Lim said the group expects uncertainties to continue and adversely impact global economic growth and financial markets. 

"The ongoing Covid-19 pandemic has significantly weakened global growth prospects with the outlook heavily contingent on how countries across the world successfully contain the pandemic over the remainder of the year. Crude oil prices suffered a further shock as members of the Organization of the Petroleum Exporting Countries (OPEC) failed to reach an agreement on production cuts, consequently dragging prices down to almost 30-year lows.

"On the domestic front, risks emanate mainly from the duration of the MCO (movement control order in Malaysia) to curb the spread of Covid-19, weakness in the commodities sector and delays in project implementation,” he said.

The group’s diversified businesses include flour milling, property development and cinema operations, said the annual report. The conglomerate also owns 18.5% equity interest in Singapore-listed agribusiness group Wilmar International Ltd.

Lim said the fluctuation of the ringgit has presented challenges to PPB as most of the raw materials for the food processing and manufacturing segments, film rights purchases and overseas investments are denominated in foreign currencies. 

"The group monitors currency fluctuations closely and hedges part of its exposure; it also takes advantage of a natural hedge in view of the fact that some of its income is generated in foreign currencies,” he said.

Malaysia’s MCO, which was initially scheduled between March 18 and 31, requires non-essential businesses to stop operations, while the public has been ordered to stay at home to curb the Covid-19 outbreak.

On March 25, Prime Minister Tan Sri Muhyiddin Yassin said the government decided to extend the MCO until April 14, because updates from the National Security Council and Health Ministry indicated an increase in Covid-19 cases. On April 10, Muhyiddin said the government was extending the MCO until April 28.

On April 23, he said the MCO will be extended for another two weeks until May 12. 

On May 10, the premier said the MCO will be extended to June 9.

At 11:46am, PPB’s share price rose two sen or 0.12% to RM16.70 for a market capitalisation of RM23.76 billion. The stock saw some 54,000 shares traded.