PPB allocates RM401mil capex to expand businesses

Managing director Lim Soon Hua said PPB Group's substantial stake in Wilmar was a long-term investment.

KUALA LUMPUR: Investment holding and property investment company PPB Group Bhd is allocating RM401mil as capital expenditure (capex) to strengthen its core businesses over the next three years.

Managing director Lim Soon Huat (pic) said of its six business segments, the grains and agribusiness division would receive the biggest chunk at RM138mil for expansion purposes, including that of its flour mills in Pasir Gudang and Vietnam.

He said the film exhibition and distribution segment would obtain the second highest amount at RM215mil to build new cinemas, as well as upgrade and extend existing ones.

“The remaining RM48mil is earmarked for the company’s property segment, environmental engineering and utilities, and consumer products,” he told reporters during the company’s analyst briefing here today.

PPB Group Director Datuk Ong Hung Hock said the milling capacity of the company’s plants in Pasir Gudang, Johor and Vietnam would be increased from 500 tonnes of wheat per day to 1,750 tonnes.

“Our revenue for the financial year ended Dec 30, 2016 was mainly contributed by increased flour sales, and we believe this segment will continue to sustain this year.

“The fact that FFM Group (a subsidiary of PPB) is expanding its flour milling capacity in Pasir Gudang and Vietnam shows that business is resilient,” he added.

PPB’s major operations include flour and feed milling, grains trading, marketing, distribution and manufacture of consumer products, film exhibition and distribution, and property investment and development.

On the group’s film exhibitor and distributor division, Golden Screen Cinemas (GSC) chief executive officer Koh Mei Lee said another nine new cinemas would be opened with the extension of three screens at GSC Summit USJ.

“At the moment, the group has 306 screens in 33 locations in the country,” she said, adding that the new GSC screens in Cambodia were slated to open by year-end.

As for PPB’s property division, Lim said the group would upgrade facilities at its shopping mall besides planning to launch another property, namely Taman Megah in Petaling Jaya with gross development value of RM500mil in the second half of this year.

“We expect the property segment to perform satisfactorily this year despite the rather challenging and subdued sentiment in the local property market,” he added.

On the environmental engineering and utilities segment, Lim said the group’s order book for this segment stood at RM160mil as at end of last year and it was pursuing a water and sewage treatment project worth RM600mil.

“This is a government project and since we have the expertise in this segment. But we cannot disclose anything yet,” he said.

Going forward, he said PPB group was optimistic that revenue from its core businesses would continue to contribute to the group’s coffer this year.

For the financial year ended Dec 30, 2016, revenue from the grains and agribusiness segment rose 6% to RM2.86bil, while that of its film exhibition and distribution segment grew 8% to RM468mil.

The environmental engineering and utilities segment registered a lower revenue of RM186mil.

Revenue from its property segment decreased marginally due to lower occupancy rates coupled with lower collection from progress billings of bungalow sales in Seberang Perai. - Bernama
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