PPB Group confident of a better year

KUALA LUMPUR: PPB Group Bhd is optimistic of a better year this financial year ending Dec 31, 2015 (FY15) driven by its strong presence in Malaysia, strategic regional expansion and its 18.3% stake in Wilmar International Ltd.
"We are quite diversified. The growth is actually quite well distributed among the various core businesses. However, our performance will be largely supported by Wilmar's operations because we own 18.3% of it," its managing director Lim Soon Huat told reporters after its AGM yesterday.
Wilmar announced a 49.1% increase in net profit to US$241.2 million (RM865.9 million) for its first quarter ended March 31, 2015 compared with US$161.8 million achieved a year ago. Its core net profit (excluding non-operating items) grew 22.7% to US$263.3 million from US$214.6 million a year ago.
The group attributed the growth to strong performance from oilseeds and grains (manufacturing and consumer products) and higher contributions from associates.
However, revenue fell 8.3% to US$9.4 billion from US$10.3 billion a year ago due to lower commodity prices.
"We believe in their integrated business model which is very powerful and they are very diversified. They have businesses ranging from agribusinesses to downstream to logistics. It's fully integrated and that business model will continue to support the performance and make the business more sustainable in the long term. Their contributions, among the portfolio companies are quite well distributed," said Lim.
PPB chairman Datuk Oh Siew Nam said while it is possible that there may be higher dividends from Wilmar if the group does well this year, it would depend on Wilmar's business requirements.
"It's (palm oil) only part of their business. They may need money for expansion. They are growing aggressively ... we cannot predict their performance but we can see whether the business is sustainable or not," he said.
On whether it plans to increase its investment in Wilmar, Oh said it is more likely to develop its own business if it has the funds and has no plans to increase its stake in Wilmar.
For the financial year ended Dec 31, 2014 (FY14), its net profit fell 6.7% to RM916.8 million from RM982.6 million a year ago. Revenue rose 11.7% to RM3.7 billion from RM3.3 billion a year ago.
Shareholders approved a final single tier dividend of 16 sen per share for FY14 at the AGM yesterday. Together with the interim single tier dividend of 7 sen per share, the total dividend paid and payable for FY14 would be 23 sen per share, amounting to RM273 million.