PPB Group's diversified businesses help weather storm in FY20

PPB chairman Tan Sri Oh Siew Nam

KUALA LUMPUR: PPB Group Bhd’s diversified stable of businesses has helped the company weather the storm and continue to create value for shareholders and other stakeholders despite the unprecedented 2020 caused by the COVID-19 pandemic.

Chairman Tan Sri Oh Siew Nam said despite the current very challenging economic conditions, the group is confident about the future and has continued to invest in its diverse business segments to further drive growth.

"The group has planned capital commitments of RM930 million over the next four years, keeping in mind the present COVID-19 challenges.

"While we are concerned about the economic impact of the pandemic, we will continue to manage our assets efficiently and strengthen the group’s prospects by strategically taking advantage of opportunities in the market,” he said in the chairman’s statement in the group’s annual report 2020.

For the financial year ended Dec 31, 2020, PPB’s group profit increased by 12 per cent to RM1.32 billion, supported largely by a 29 per cent increase in contribution from its 18.6 per cent-owned associate Wilmar International Ltd and higher profitability in its grains and agribusiness, and consumer products segments.

However, Tan noted that revenue decreased by 11 per cent to RM4.19 billion, largely attributable to the revenue decline in the company’s film exhibition and distribution segment from RM556 million in 2019 to RM114 million in 2020 due to the prolonged total and partial closure of cinemas, and deferment of major movie releases.

Moving forward, Oh said Malaysia’s economic growth is expected to rebound in 2021, as the economy recovers from the contraction in 2020.

While the COVID-19 pandemic both locally and globally has not yet fully abated, he said there were promising and optimistic signs on the horizon, as the vaccination initiative in Malaysia would allow the domestic economy to function more normally and restore consumer confidence.

"Global vaccination efforts will also benefit our domestic economy and help restore our film exhibition and distribution business,” he said.

As for the grains and agribusiness, consumer products, and environmental engineering and utilities segments, he said they are expected to continue to generate stable revenues for the group.

While the longer-term impact of the pandemic on the group’s film exhibition and distribution and property businesses will continue to weigh down the group performance, he said PPB is confident that the group will be able to remain resilient amid the volatility, and capitalise on growth opportunities.

"Our market exposure is limited as most of our goods and services comprise essentials and basic food products.

"We expect the group’s financial performance will depend on and be significantly bolstered by Wilmar’s business performance,” he added. - Bernama

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