Boustead Q1 loss widens on coronavirus impact


  • Corporate News
  • Saturday, 20 Jun 2020

“As a result of the Covid-19 pandemic and subsequent MCO, business activity essentially came to a halt in many industries.“The Boustead Group was not spared the brunt of this, as most of our divisions were affected, impacting earnings for the first quarter, ” said Boustead chairman Datuk Seri Mohamed Khaled Nordin (pic) in a statement.

PETALING JAYA: Boustead Holdings Bhd’s loss for the first three months of 2020 widened compared to the same period a year ago as the group took a beating from the coronavirus (Covid-19) pandemic.

In a filing with Bursa Malaysia yesterday, the conglomerate posted a loss of RM73.1mil for the first quarter ended March 31, compared with the RM22.4mil loss a year earlier.

Boustead said its hotels, heavy industries, properties and petrol stations businesses were hit from the movement control order (MCO) as business and household activity froze from the measures to contain the spread of Covid-19.

“As a result of the Covid-19 pandemic and subsequent MCO, business activity essentially came to a halt in many industries.

“The Boustead Group was not spared the brunt of this, as most of our divisions were affected, impacting earnings for the first quarter, ” said Boustead chairman Datuk Seri Mohamed Khaled Nordin (pic) in a statement.

Despite expecting a challenging year for Boustead, he is bullish on the group’s transformation programme.

“With this plan underway, we aim to strengthen the group’s operations and drive performance to see brighter prospects over the next three years, ” Mohamed Khaled said. For the quarter under review, Boustead posted a decline in revenue by 10% to RM2.26bil from RM2.51bil previously.

Boustead said its trading, finance and Investment division posted a loss of RM22mil during the first quarter mainly due to a stockholding loss by Boustead Petroleum Marketing as a result of the sharp drop in fuel price as well as lower sales volume during the MCO period.

Its tourism related subsidiaries under the division including Boustead Travel Services and Boustead Cruise Centre were also impacted by the Covid-19 pandemic and MCO restrictions.

Boustead said its property and Industrial Division incurred a deficit of RM25mil, mainly due to weaker performances from its hotel and industrial segments.

“The hotel segment was weighed down by the Covid-19 pandemic, while the industrial segment was affected by lower demand for fibre cement board and other building materials, due to the temporary closure of construction projects during the MCO, ” it said.

It expects the hotel segment to continue facing challenges in terms of occupancies and rate. “The division has taken several initiatives to minimise the impact such as conducting online marketing and various promotional activities, as well as introducing austerity measures to contain costs, ” Boustead said.

Notably, Boustead is currently a privatisation target by its controlling shareholder Lembaga Tabung Angkatan Tentera (LTAT).

Last month, LTAT, which 59% stake in Boustead, is considering privatising the latter at an indicative price of 80 sen per share.

Boustead holds equity interest in four publicly listed companies - Affin Bank Bhd, Boustead Plantations Bhd, Boustead Heavy Industries Corp Bhd (BHIC) and Pharmaniaga Bhd, all of which its parent LTAT also holds stakes.

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