Update Boustead 3Q profit rises 25% to RM98m, pays 7.5 sen dividend

by **Cals** Fri 29 Nov 2013, 18:25

Update Boustead 3Q profit rises 25% to RM98m, pays 7.5 sen dividend

Business & Markets 2013

Written by Chong Jin Hun of theedgemalaysia.com

Friday, 29 November 2013 13:37

KUALA LUMPUR (Nov 29): Boustead Holdings Bhd reported a 25% increase in third quarter net profit from a year earlier but nine-month bottom line fell 3%. The decline came mainly on the diversified group's lower income from its oil palm plantation operations.

In a statement to the exchange, Boustead said net profit rose to RM97.5 million in the third quarter ended September 30, 2013 (3QFY13) from RM79.5 million. Revenue climbed to RM2.7 billion from RM2.51 billion.

Boustead plans to pay a dividend of 7.5 sen a share for 3QFY13.

Nine-month (9MFY13) net profit fell to RM258.6 million from RM266.2 million. Revenue was however higher at RM7.62 billion compared to RM7.37 billion.

"For the 9-month period, the plantation division contributed a pre-tax profit of RM45.8 million (2012: RM161.8 million) mainly due to the lower average CPO (crude palm oil) price of RM2,333 per MT, representing a decrease of RM743 or 24% against last year corresponding period's average of RM3,076 per MT.

"In addition, FFB (fresh fruit bunch) crop totalling 754,728 MT was 7% short of the previous year," Boustead said.

Higher profit at its property unit besides income from the heavy industries division had mitigated the impact of a weaker plantation business.

The firm said 9MFY13 revenue had grown as "most of the divisions had recorded an increase". The list excludes the plantation unit which registered a 29% revenue fall.

Looking ahead, Boustead is less optimistic on its plantation business. This is in anticipation of a "sluggish" outlook for CPO prices.

As such, Boustead is looking at its pharmaceutical, property, and heavy industries units to support earnings. The firm said government concession sales will be the main growth driver for the pharmaceutical unit.

The property segment will be helped by on-going projects and the group's investment real estate.

"The heavy industries division's earnings will be largely derived from the littoral combat ship project and the on-going MRO ( maintenance, repair, operations) activities.

"The diversified nature of the group's businesses in six segments of the Malaysian economy augurs well for the group, and would enable the group to deliver a satisfactory set of results for the year under review," Boustead said.