Boustead 3Q net profit down 48% y-o-y

Boustead 3Q net profit down 48% y-o-y
Written by Chong Jin Hun
Monday, 23 November 2009 15:57

KUALA LUMPUR: BOUSTEAD HOLDINGS BHD []'s third quarter (3Q) net profit fell 47.5% year-on-year, dragged down by lower income from its PLANTATION [], heavy industries, real estate and hotel operations.

In a statement to the exchange today, Boustead said net profit declined to RM86.16 million in 3Q ended September from RM164 million, while revenue dropped 27.2% to RM1.42 billion from RM1.95 billion.

Cumulative nine-month net profit dipped 58.6% to RM193.92 million from RM468.2 million while revenue was down 32.6% to RM3.91 billion from RM5.8 billion.

"We are cautiously optimistic that the steady price range of RM2,200 to RM2,400 for crude palm oil (CPO) could sustain until the end of the year on the back of steady overseas demand as world economies recover. A factor that bodes well for the CPO price would be the potential further weakness of the US dollar," Boustead said.

On its heavy industries unit, the company said it would continue developing its defence and commercial businesses, and pursue strategic partnerships with foreign parties to promote the TECHNOLOGY [] transfer.

Meanwhile, Boustead's property division's earnings are expected to be driven by current developments at its Mutiara Damansara and Mutiara Rini townships, besides the company's commercial and retail PROPERTIES [].

The expansion of its hotel operations which now include the five-star Royale Chulan Hotel and Royale Bintang Seremban are anticipated to further boost revenue for the conglomerate's hospitality arm.

Boustead intends to reward its shareholders with a third interim dividend of 7.5 sen per share less 25% income tax.


http://www.theedgemalaysia.com/business-news/154259-boustead-3q-net-profit-down-48-y-o-y.html



Boustead’s 3Q profit down 47% y-o-y
Tags: Affin Group | Boustead | Lodin Wok Kamaruddin

Written by Isabelle Francis
Tuesday, 24 November 2009 10:28

KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] posted a net profit of RM86.2 million in the third quarter (3Q) ended Sept 30, 2009, down 47% from RM164 million a year earlier but up 84% from the preceding quarter’s earnings of RM63 million.

Revenue dropped 27% year-on-year (y-o-y) to RM1.42 billion from RM1.95 billion but was up 11% from the preceding quarter. Basic earnings per share (EPS) fell to 12.41 sen from 25.48 sen a year earlier.

It declared a third interim dividend of 7.5 sen per share less tax, bringing the total to 17.5 sen or 35% per share less tax for the current financial year ending Dec 31, 2009. The latest dividend is payable on Dec 29, 2009.

For the nine-month period, net profit fell 59% to RM193.92 million from RM468.2 million a year earlier, while revenue dipped 33% to RM3.91 billion from RM5.8 billion.

EPS fell to 16.55 sen from 48.36 sen, partly due to the dilutive effect of a rights issue.

“Clearly the tide and sentiments are turning by virtue of the fact that our earnings are up (quarter-on-quarter). The sectors of the economy we are involved in, namely the consumer and the heavy industries segments bode well for the group while our PLANTATION []s continue to be a steady revenue generator and profit contributor.

“Our balance sheet looks strong given our recent rights issue which generated proceeds in excess of RM700 million. Our paid-up capital has increased to RM456 million and our gearing ratio has dropped significantly to 0.8 from 1.2 times. In essence, our financial strength is strong while our prospects look better,” said group managing director Tan Sri Lodin Wok Kamaruddin in a statement yesterday.

Boustead told Bursa Malaysia yesterday its highest profit earner — the heavy industries division — contributed a pre-tax profit of RM113 million for the nine-month period versus RM233.1 million a year earlier due to slower progress of work and cost escalation.

Its second-largest profit contributor, the plantation division, contributed a pre-tax profit of RM50.7 million versus RM260.8 million.

Boustead said the division achieved an average palm oil price of RM2,172 per tonne versus RM3,103 per tonne previously. Fresh fruit bunch harvest totalling 827,850 tonnes was 5% lower than last year.

It said its property division’s pre-tax profit of RM58.9 million for the period was 44% lower than last year’s. Profit from its hotel operation was lower due to the start-up cost of the recently opened Royale Chulan Hotel. It added that the property development segment profit was also lower, due to the absence of corporate lot sales.

Boustead said its finance and investment division reported an improved pre-tax profit of RM29.6 million.

It noted that BH Insurance posted a 62% higher pre-tax profit of RM24.5 million, mainly due to the increase in underwriting and investment income.

Meanwhile, it said the Affin Group posted a better pre-tax profit of RM383.2 million versus RM288.6 million a year earlier, due to improved net interest and Islamic banking income, while loan provisions were also lower.

Boustead said the trading division, meanwhile, posted a lower profit of RM21.5 million. The division gained profits from its petroleum retail unit Boustead Petroleum Marketing Sdn Bhd (BHPetrol), and from the LCCT Baggage Handling system project.

On its outlook,

• Boustead said its most lucrative business, the heavy industries division, will continue with its effort in developing its defence and commercial businesses. It will also establish more partnerships.

• The company is cautiously optimistic that CPO prices could sustain at the RM2,200 to RM2,400 level till year-end on the back of steady overseas demand as economies around the world recover.

• It said a factor that bodes well for the CPO price would be the potential for further weaknesses in the US dollar.

• It added that the property division’s earnings would be driven by the ongoing developments at Mutiara Damansara and Mutiara Rini townships and the division’s stable of commercial and retail PROPERTIES [].

• The company said that the expansion of the hotel activities, which now include the five-star Royale Chulan Hotel and Royale Bintang Seremban are expected to further increase revenue for the hotel division.

This article appeared in The Edge Financial Daily, November 24, 2009.