Heavy industries unit pulls down Boustead’s results

LUMUT, 8 Mac -- Kapal 'Littoral Combat Ship' (LCS) untuk Tentera Laut Diraja Malaysia (TLDM) yang kini masih dalam proses pembinaan oleh Boustead Heavy Industries Corporation pada Majlis Perletakan Lunas Kapal LCS1 yang disempurnakan oleh Menteri Pertahanan Datuk Seri Hishammuddin Tun Hussien di Boustead Naval Shipyard, Pangkalan TLDM hari ini. Littoral Combat dijangka digunakan pada tahun 2019. --fotoBERNAMA (2016) HAK CIPTA TERPELIHARA

KUALA LUMPUR: Boustead Holdings Bhd slipped into a loss attributable to shareholders of RM21.5mil for the first quarter (Q1) ended March 31, 2016, compared with small earnings of RM100,000 a year earlier.

The conglomerate, whose controlling shareholder is the Armed Forces Fund board (LTAT), only managed a net profit of RM9.5mil against RM69.5mil in the corresponding period of 2015 despite a RM34.6mil gain on disposal of plantation land in the quarter under review (none in Q1 2015).

The profits attributable to non-controlling interests and holders of perpetual sukuk were RM12.8mil and RM18.2mil respectively. 

Revenue slid 1.9% to RM1.86bil while operating cost grew by 1.8% or RM32.2mil.

Of Boustead’s six divisions, four boosted their pre-tax profit. The two whose business shrank were heavy industries (a deficit of RM73mil versus a pre-tax profit of RM3.6mil previously) and pharmaceutical (a pre-tax profit of RM21.5mil against RM32.5mil before).

On the heavy industries division, whose activities include shipbuilding and repair and oil and gas-related heavy engineering, Boustead told Bursa Malaysia: “Boustead Naval Shipyard recorded a higher deficit in the current quarter, mainly due to downward revision of margin for the LCS (littoral combat ship) project and increase in operating costs.

“For the period under review, MHS Aviation incurred a loss of RM4.3mil (2015: pre-tax profit of RM15.1mil) as the bottom line was affected by the slowdown in the oil and gas industry.”

Explaining the pharmaceutical division’s lower pre-tax profit, the company said it was mainly due to higher selling/distribution and finance costs as well as an increase in amortisation of Pharmacy Information System cost.

Boustead said it expected 2016 to be a challenging year in view of uncertainties surrounding the global economy and financial landscape.

It added that the diversified nature of its business, however, augured well for the group.

“Although it will certainly be a tough year ahead, we are optimistic that the group will remain resilient over the long-term, building on our strong foundation. We will continue to tighten our operational efficiencies and pursue opportunities for growth in order to deliver sustainable results moving forward,” deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said in a media statement.

The board declared a first interim dividend of 5 sen per share for the financial year ending Dec 31, 2016, same as the amount announced last year.

Boustead shares fell 25 sen to RM2.84 on Wednesday with 1 million shares traded.