KUALA LUMPUR (Aug 28): Diversified company PPB Group Bhd (KL:PPB) said escalating geopolitical tensions could add to cost pressures at its grains and agribusiness operations in the second half of 2026, as higher wheat, energy and freight costs squeeze margins.
“Rising input costs, including energy and freight, could add pressure on margins, especially in the second half of the year," Jeremy Goon, the chief executive officer of FFM Bhd, PPB’s 80%-owned grains and agribusiness arm, told an analyst and media briefing on Friday.
PPB’s gross profit margin narrowed to 12.9% in the first six months ended June 30, 2026 (1HFY2026) from 13.5% a year earlier, amid higher input costs.
Wheat prices have risen as intensifying conflict and attacks on port infrastructure in the Black Sea region disrupted grain shipments. The region accounts for about 30% of global wheat exports.
Goon said PPB’s core wheat supply remains secure, with the group sourcing mainly from Australia, the US and Canada.
The group is managing the higher costs through prudent inventory management and operational efficiency, while expecting a firm ringgit to provide some relief as raw materials are largely denominated in US dollars.
FFM operates five flour mills in Malaysia and two in Vietnam. It also has a 43.4% stake in an associate in Thailand and interests in seven associates in China, each with a 20% stake. The grains and agribusiness segment contributed 67.3% of PPB’s total revenue of RM2.6 billion in 1HFY2026.
Cinema recovery seen in 2H
PPB expects its cinema business to gain momentum in the coming quarters, helped by a stronger movie slate and growth in non-ticket revenue.
Golden Screen Cinemas Sdn Bhd, which operates Malaysia’s largest cinema chain with a 50% market share, operates 505 screens across 53 locations nationwide. The business captures more than half of the country’s domestic box-office collections.
“We see admissions in Malaysia were down 14% year-on-year in 1HFY2026, but we expect a stronger slate to lift attendance in the second half,” GSC CEO Koh Mei Lee said.
Growth in non-ticket revenue, including food and beverage outlets, luxury cinema dining and merchandise sales, is also expected to support the business, she said.
Among the major releases expected in the second half are The Odyssey, Avengers: Endgame, Jailer 2 and Spider-Man: Brand New Day.
Koh also said Vietnam’s cinema market continues to outperform Malaysia in admissions growth, helped by strong local content and its larger population.
PPB also plans to refurbish selected cinemas in Malaysia to boost admissions and deepen engagement with moviegoers.
At Friday’s midday break, PPB shares fell six sen or 0.59% to RM10.12, valuing the group at RM14.4 billion. The stock has declined 4.89% so far this year.