PPB Group first-quarter earnings surge 25%

PETALING JAYA: PPB Group Bhd expects its grains and agribusiness segment, which contribute the largest chunk to its revenue, to perform satisfactorily on the back of a stable grains commodity market coupled with its efforts to drive production and cost efficiency.

Whilst the volatility of global grains commodity prices have moderated at the beginning of this year, PPB remains cautious as it believes potential adverse weather conditions in certain major grain growing countries may affect the grains commodity prices.

PPB also expects Wilmar International Ltd to continue to contribute substantially to the overall profitability of the group.

For the first quarter ended March 31, 2023 (1Q23), PPB reported a revenue of RM1.52bil, an increase of 10% compared to RM1.38bil recorded in the previous corresponding quarter.

Its net profit surged by about 25% to RM377.54mil in the quarter from the RM303.16mil reported in 1Q22, despite contribution from Wilmar decreasing by 19% to RM321mil from RM394mil in 1Q22.

The better performance for the period was attributable to the turnaround in profits of its grains and agribusiness, as well as film exhibition and distribution segments, PPB said in a filing with Bursa Malaysia yesterday.

Revenue from the group’s grains and agribusiness segment increased by 11% to RM1.16bil in 1Q23 from RM1.04bil in 1Q22.

The segment also recorded a pre-tax profit of RM58mil for 1Q23, compared to the loss before tax of RM138mil in 1Q22. The improved performance was mainly attributable to a stabilised grains commodity market.

Its film exhibition and distribution segment’s revenue more than doubled to RM128mil from the RM64mil reported in the previous corresponding quarter.

It reported a marginal loss of RM25,000 in 1Q23 compared to a loss of RM30mil in 1Q22, on the back of a 113% and 96% increase in admissions and box office collections, respectively, in the period.

PPB believes the recovery of its film exhibition and distribution segment is in line with the ongoing improvement in consumer sentiment and confidence.

“The upcoming line-up of strong movie titles beginning the second quarter of this year would contribute positively to the segment’s performance in 2023,” it added.

The group’s consumer products segment recorded higher revenue and profit of RM199mil and RM7.3mil, an increase of 9% and 5% from the RM183mil and RM7mil recorded in 1Q22, respectively.

The increase was mainly attributed to higher sales of bakery and consumer products, it noted.

“The consumer products segment will continue to leverage its well-established nation-wide distribution network and integrated marketing system to enhance its operational efficiency,” it said.