The diversified group, which has interests in agriculture, food production, film distribution and property development, reported a net profit of RM2.2 billion for the year ended Dec 31, 2022, a 48% increase from the previous financial year.
The company turned in a net profit of RM415 million in Q4 2022, a drop of 17.4% compared with the previous corresponding period when it recorded a net profit of RM502.5 million.
There was a 47% drop in net profit in Q4 2022 compared with the preceding quarter.
The lion’s share of the profit was contributed by Wilmar International Ltd, which came in with RM2.1 billion for FY22.
This was 40% more than the RM1.5 billion recorded in the previous year. Following a divestment of its interests in PPB Oil Palms in 2009, the group now holds an 18.5% stake in Wilmar.
“Wilmar’s performance will continue to contribute substantially to the overall profitability of the group,” PPB said in a filing to Bursa Malaysia.
The company has declared a dividend of 28 sen per share and a 12-sen interim dividend for Q4 2022. This raised the tally to 40 sen for FY22, five sen higher than the previous year.
The improved financials are attributed to a more stable grain community market, higher sales in fast moving consumer goods and the revival of the film industry.
PPB has an interest in the leisure and entertainment sector through its subsidiary PPB Leisure Holdings Sdn Bhd, which owns Golden Screen Cinemas Sdn Bhd (GSC).
Losses in the film segment narrowed to RM17 million for this fiscal year under review, from RM113 million in FY21.
“The losses were mainly attributed to the impairment in cash flow in the Vietnam expansion, without which the group would have posted a RM10 million profit,” it said.
GSC CEO Koh Mei Lee expressed optimism about the future of the cinema industry, citing numerous Hollywood blockbusters and a strong set of locally co-produced films in the pipeline for this year.
High cost of doing business going forward
PPB noted that while the recovery is expected to gain momentum, challenges remain. One is the high cost of doing business caused by a number of factors.
It said the removal of the electricity subsidy is expected to raise its utility costs by 30% to 38%.
At a media briefing today, managing director Lim Soon Huat said that based on current utilisation rates at its plants, costs could increase by RM20 million to RM25 million across the group for the coming year.
“For businesses to sustain themselves, we just have to learn to deal with the high cost of utilities,” he said.
Lim emphasised that the group would focus on improving operational efficiency to mitigate this factor.
Jeremy Goon, the CEO of its food production unit FFM Group, said PPB was optimistic that wheat and grain prices would be less volatile than last year.
“We do not see the same disruptions (which occurred last year) that were caused by the Ukraine war, but are more concerned about weather conditions — in Argentina specifically — which could affect grain prices,” he said.
PPB Group, formerly known as Perlis Plantation Bhd, was founded by tycoon Robert Kuok and is involved in agribusiness, consumer products, film and property.
Kuok Brothers Sdn Bhd owns a 39.87% stake in the company.
The stock price has remained steady, closing yesterday at RM17.60, giving the company a market capitalisation of RM24.9 billion.