KUALA LUMPUR (Aug 29): PPB Group Bhd reported a 70.75% drop in net profit to RM202.81 million for the second quarter ended June 30, 2023 (2QFY2023), from RM693.41 million a year earlier, dragged by lower contribution from its 18.8%-owned Singapore-listed Wilmar International Ltd.

This is the group's lowest quarterly net profit since 2QFY2021, when it posted a net profit of RM183.47 million.

Earnings per share declined to 14.26 sen from 48.74 sen a year before, said PPB in its quarterly results announcement to Bursa Malaysia.

Revenue for the quarter slid 4.01% to RM1.48 billion, from RM1.54 billion a year earlier.

The group declared an interim dividend of 12 sen per share, payable on Sept 22.

PPB said the contribution from Wilmar plunged 77% to RM139 million, compared with RM598 million in 2QFY2022,

The group added that its grains and agribusiness contributed a lower profit of RM68 million in 2QFY2023, compared with RM115 million a year ago, dragged by losses recorded at the Indonesia and China flour mills with lower sales volume and higher costs of raw materials on hand. 

The group's film exhibition and distribution segment also reported a lower profit of RM14 million, down from RM22 million previously, due mainly to higher cinema operating costs as cinema operations resumed full normalcy.

Its property business’ profit dropped to RM3 million from RM13 million due to the absence of progressive profit recognised for sold units as the Megah Rise residential project was fully completed in August 2022 and on higher mall operating costs.

Profit from PPB's consumer products segment also came in lower at RM189 million versus RM192 million previously, mainly due to lower sales of consumer products and higher trade promotion expenses. 

The weaker quarterly performance also resulted in PPB's net profit for the first half of FY2023 falling 41.76% to RM580.35 million, from RM996.57 million in the previous January-June period. Cumulative revenue, however, increased 3.78% to RM3 billion, from RM2.89 billion.

Looking forward, the group expects the global grains commodity market to remain moderately volatile as the global supply risk could reemerge with any escalation of geopolitical tension of Ukraine and Russia, as well as weather conditions affecting the production forecast of grains-growing countries.

With that, any downside supply risk could affect its grains and agribusiness segment’s performance for the rest of the year, it noted. 

Nonetheless, it expects the grains and agribusiness segment to perform satisfactorily as it continues its efforts to drive production and cost efficiency. 

The group also said its consumer products segment is expected to deliver a satisfactory set of results by capitalising on its established nationwide distribution network and integrated warehousing and marketing system, while continuing efforts to expand its consumer products range and widen its distribution base.

Meanwhile, the group anticipates the Malaysian cinema industry performance to remain resilient with the upcoming lineup of strong movie titles, which should contribute positively to the film exhibition and distribution segment's performance in 2023.

For its property segment, PPB expects satisfactory performance as new development projects in Kedah and Penang are at their final planning stages. This coupled with improved mall occupancy and footfall, is expected to drive segment revenue in 2023.

PPB’s share price settled unchanged at RM15.76 on Tuesday, bringing the group a market capitalisation of RM22.42 billion.