Boustead 3Q earnings down on lower contributions

KUALA LUMPUR: Boustead Holdings Bhd recorded a 67% fall in net profit to RM6mil for the third quarter ended Sept 30, 2015 from RM18.2mil it posted last year, on weaker contributions from the property, finance and investment, trading and industrial, and heavy industries business segments.

Revenue for the period was 21% lower at RM2.12bil compared with RM2.694bil.

Nine-month earnings was 91% lower to RM9mil from RM109.2mil in the same period last year on revenue of RM6.22bil against RM7.782bil a year ago. 

“It has undoubtedly been a trying economic period, with external pressures impacting the group’s earnings. However, despite the volatile economic climate, the diversified nature of the group has enabled us to remain resilient and deliver sustained results across most of our divisions,” said deputy chairman/group managing director Tan Sri Lodin Wok Kamaruddin. 

The biggest contributor for the nine-month period was the plantation division, recording higher pre-tax profit of RM88.7mil from RM82.2mil last year, due to gains realised on disposal of lands.

This mitigated the lower average crude palm oil price or RM2,160 per mt. Fresh fruit bunches crop production was 772,083 mt.

The pharmaceutical division recorded better pre-tax profit of RM70.7mil during the period, from RM68.2mil in the year before, due to favourable manufacturing profit margins and lower costs, as a result of cost optimisation initiatives and better productivity. 

However, pre-tax profit for the property division was lower at RM31.2mil due to lower profit margins on affordable homes. 

Profit in the trading and industrial division was also lower at RM39.1mil due to a fall in volume and fuel prices. Meanwhile, the finance and investment division recorded lower profit at RM21.3mil due to weaker contributions from the Affin group and funding cost of investments. 

The heavy industries division posted a loss of RM31.6mil mainly due to provision of foreseeable loss for the restoration of the vessel KD Perantau during the second quarter. 

“Despite the challenging environment, by leveraging on our strong track record and multiple business streams, we are confident that we will be able to weather through this and continue to move forward,” added Lodin.