Boustead's 2Q earnings up on higher contribution from property

Boustead's 2Q earnings up on higher contribution from property
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Thursday, 22 August 2013 11:22

KUALA LUMPUR: BOUSTEAD HOLDINGS BHD [] recorded a net profit of RM61.2 million for the second quarter ended June 30, 2013 (2QFY13), 40% higher than a year ago on the back of higher contribution from the property division offset by poor performance of its PLANTATION [] division.

Revenue inched up 4.2% to RM2.4 billion.

For the cumulative six months, net profit fell 14.4% to RM161.1 million from RM188.3 million a year ago. Revenue was marginally higher at RM4.92 billion compared with RM4.85 billion.

Boustead has six business divisions, all with the exception of plantation and pharmaceutical, reported improved performance during the six months.

In its filing with Bursa Malaysia yesterday, Boustead said the property division was the biggest contributor to the group, delivering a profit before tax (PBT) of RM77 million for the six-month period, marking a 38% increase compared with last year's RM56 million.

The division's strong results were attributed to the sale of a corporate lot at the highly sought after Mutiara Damansara development in Selangor in addition to increased progress billings for its property development projects as well a gain of RM15 million from the disposal of an investment property.

The plantation division, however, contributed a lower PBT of RM16 million compared with RM112.4 million previously due to dipping crude palm oil (CPO) prices.

The average CPO price realised for the half year was RM2,328 per tonne, a decrease of RM862 or 27% against the average of RM3,190 for the same period last year, it added.

At the same time, lower fresh fruit bunch production totalling 485,346 tonnes, 4% short of the previous year, also impacted the division.

In fact, for 2QFY13, the plantation division went into the red with a deficit of RM14.9 million.

PBT from the pharmaceutical division fell 41.6% to RM32.1 million from RM55 million a year ago.

Notably, the heavy industries division saw a turnaround during the first half, registering PBT of RM29.2 million compared to a loss of RM33.4 million a year ago.

"The heavy engineering segment registered a profit during the period under review, as its performance was no longer impacted by costs from the old shipbuilding projects," Boustead said.

Another positive factor was the progress achieved on the Littoral Combat Ship project.

For the quarter, the group declared a single-tier dividend of 7.5 sen per share which will be paid on Sept 30.


On its prospects, Boustead noted that the economic outlook remains challenging but said that the diversified nature of its businesses in six segments of the Malaysian economy augurs well for the group, and would enable it to deliver a satisfactory set of results for the year under review.



This article first appeared in The Edge Financial Daily, on August 22, 2013.