KUALA LUMPUR (Feb 27): Diversified PPB Group Bhd (KL:PPB) has reported a 140% jump in its operating profit before tax to RM1.03 billion in the last quarter of 2025 compared with RM422 million in the same quarter of 2024.
But a huge RM4.17 billion charge on its investment in Singapore-listed Wilmar International Ltd (SG:WILMAR INTL) meant that it suffered a RM3.2 billion loss for the quarter.
PPB has a substantial stake in Wilmar, which had in the past year ran into problems with regulators in Indonesia, where it has a big operation. Wilmar is disputing some of the allegations against it.
PPB's revenue for the quarter under review declined 6.16% to RM1.34 billion from RM1.43 billion in 4QFY2024, a bourse filing showed.
Despite the impairment, PPB declared a final dividend of 30 sen per share, to be paid on June 4.
The jump in operating profit was driven by a stronger contribution from Wilmar of RM928 million from RM277 million the year before, which was partly offset by a 31% decline in core business earnings of RM100 million from RM145 million the year before.
“The group has determined that an impairment of RM4.17 billion is warranted. This impairment has been recognised in the financial statements of 2025. The carrying value of the group’s investment in Wilmar is RM16.59 billion, representing the group’s 18.8% share of Wilmar’s net asset,” PPB said.
It added that the board has adjusted Wilmar's growth projections to align with the market outlook, adopting a higher rate of return expectation to account for the increased operational risks in the respective markets.
Because of the impairment, for the full FY2025, PPB posted a net loss of RM2.73 billion against a net profit of RM1.22 billion a year ago, while revenue was RM5.43 billion from RM5.39 billion.
Looking ahead, PPB said world grain prices are projected to remain relatively stable, supported by sufficient global supply even as uncertainties persist across global trade and microeconomic conditions. The strengthening of the ringgit against the US dollar has provided some cost relief for grain importers, although the operating environment remains highly competitive.
“Notwithstanding the provision for impairment recognised, the group remains cautiously optimistic regarding Wilmar’s underlying resilience to navigate these challenges. Wilmar's operations are expected to continue contributing substantially to the overall profitability of the group,” it added.
Shares of PPB closed up four sen or 0.37% at RM10.88 on Friday, giving the group a market capitalisation of RM15.48 billion.