Boustead back in black in Q1, declares 2.5 sen dividend

PETALING JAYA: Boustead Holdings Bhd returned to the black registering a net profit of RM6.1 million in the first quarter (Q1) ended March 31, 2018 against a net loss of RM4 million in the same quarter a year ago, driven by improved performance in the heavy industries division as well as better share of results from associates and joint ventures.
This was on the back of a 5.5% drop in revenue to RM2.25 billion from RM2.38 billion.
Boustead has proposed to declare an interim dividend of 2.5 sen per share for the quarter under review.
The group said in a filing with the stock exchange that its plantation division reported a lower profit before tax (PBT) of RM7.8 million in Q1 due to lower palm product prices, offsetting the positive effect of lower finance costs of RM1.8 million arising from reduced borrowings and higher fresh fruit bunches (FFB) production.
Average selling price of CPO was at RM2,491 per metric tonne (MT), down by RM675 or 21% from RM3,166 per MT in Q1 FY17.
The finance & investment division saw increased PBT of RM30.8 million, thanks to better share of results from associates and joint ventures.
For the heavy industries division, it improved to a deficit of RM12.3 million from a deficit of RM50.6 million in Q1 FY17 on stronger contribution from Boustead Heavy Industries Corp and Boustead Naval Shipyard.
The pharmaceutical division recorded a higher PBT of RM24.4 million, buoyed by increased contribution from the private sector business and continuous cost optimisation measures, while the property division recorded a higher deficit of RM8.1 million due to weaker results from the hotel segment.
Boustead said although the price outlook for CPO is not encouraging, the European Union's removal of anti-dumping duty for biodiesel from Indonesia is positive news for the sector, coupled with the likelihood of higher tariffs on US soybean by China may lend support to palm oil as a potential edible oil substitute.
"In addition, the possibility of crude mineral oil prices remaining above US$70 per barrel could encourage more biodiesel production in Indonesia using palm oil as feedstock."
With improved contributions from its concession business as well as higher demand from the private sector business and its Indonesian operations, the group said the pharmaceutical division is poised to further tap into vast market opportunities, both in Malaysia and abroad.
At the midday break, Boustead's share price was unchanged at RM2.42, with some 286,000 shares changing hands.