This article first appeared in The Edge Financial Daily, on May 11, 2016.

KUALA LUMPUR: PPB Group Bhd, which expects its Vietnamese cinema associate to double its contribution to the group’s profit in the current financial year ending Dec 31, 2016 (FY16), also foresees that the group will be maintaining in FY16 the financial performance it achieved in FY15.

“In terms of profit, we will continue to deliver the same profits this year (FY16),” PPB Group managing director Lim Soon Huat told reporters after the company’s annual general meeting yesterday.

“We believe the company will continue to do well in our core businesses, particularly in the grains and agribusiness [segment], where we will continue to grow our capacity. On the film exhibition and distribution segment, we have plans to grow, and will continue to grow our cinemas in Malaysia and regionally,” he added.

PPB Group, controlled by tycoon Tan Sri Robert Kuok, saw its net profit increase 15% to RM1.05 billion in FY15, from RM916.78 million in FY14, driven mainly by higher profit contributions from the grains and agribusiness segment, foreign-exchange translation gain from Wilmar International Ltd’s results, which are reported in US dollars, as well as profits from its investments and other operational segments.

Revenue rose 9% to RM4.05 billion in FY15, from RM3.7 billion in FY14.

The group’s film exhibition and distribution segment contributed RM16.5 million to the group’s profits in FY15, the second highest after its core grains and agribusiness segment (RM65.3 million).

PPB, which owns 100% of Golden Screen Cinemas Sdn Bhd in Malaysia, increased its stake in Vietnam-based Galaxy Studio Joint Stock Co to 40% from 25% in the fourth quarter of FY15.

The group said early last month it was planning to open seven new cinemas and extend two new cinemas, which include investments in Cambodia.

Its Vietnamese film business contributed RM6.5 million to the group’s profit in FY15, according to PPB Group head of corporate affairs Koh Mei Lee.

“With the higher capacity of screens and increased shareholdings, we should be able to double what was achieved in FY15,” she said, adding that PPB plans to open four new cinemas in Vietnam this year.

Koh, who is also GSC Group chief executive, said Golden Screen Cinemas (Cambodia) Co Ltd’s maiden opening of a nine-screen cinema in Phnom Penh had been delayed to the fourth quarter of this year, pending the completion of the shopping mall where the cinema will be located.

“So, we don’t expect contributions from the Cambodian business to [come in] so soon until maybe the year after,” she added.

PPB Group holds an 18.6% stake in Wilmar. Lim said the group derives 65% to 70% of its profit from Wilmar, but declined to comment on Wilmar’s earnings prospects, citing the group was unable to do so as “we’re just a shareholder of Wilmar and is not involved in its operations”.

He also said although the property segment contributes a small portion of the group’s profit, the company is cautious about its development projects going forward, and is choosing instead to focus on delivering its Southern Marina Residences development in Puteri Harbour, Johor, which carries a gross development value of RM1.5 billion.

He also said the company is continuing with Phase 2 of the Taman Tanah Aman development in Seberang Perai, Penang. The project has five phases, comprising a clubhouse, 48 units of bungalows, 24 units of two-storey semi-detached houses and 12 units of two-storey shoplots.

“We want to be cautious in this challenging market and we want to look at the right timing before we launch any major developments,” he said.

Lim also reiterated that the company plans to maintain its strong cash position as the company braces for challenging times ahead.

“What we want to have is to continue to maintain a strong and healthy cash flow — that has always been PPB’s position,” he said. However, he added that the group is open to synergistic investment opportunities, though he noted that PPB is not presently in talks with any companies.