Boustead posts RM129mil net profit in FY22, despite RM552mil Pharmaniaga writedown

NST Tue, Feb 28, 2023 06:33pm - 2 months View Original

BHB group chief executive officer Izaddeen Daud said it was deeply concerning that Pharmaniaga had to take on the significant impairment.

KUALA LUMPUR: Boustead Holdings Bhd (BHB) posted a consolidated net profit of RM129 million for the financial year ended Dec 31 2022 on a higher revenue of RM15.1 billion.

The group's bottomline was primarily impacted by impairment at the pharmaceutical division by Pharmaniaga Bhd, mainly arising from the writedown of slow-moving Covid-19 vaccine inventories amounting to RM552 million.

The writedown was in adherence with the requirements of the Malaysian Financial Reporting Standards (MFRS) namely MFRS 102 - Inventories.

As a result, BHB's fourth quarter results showed a loss of RM676 million.

BHB group chief executive officer Izaddeen Daud said it was deeply concerning that Pharmaniaga had to take on the significant impairment.

"Nevertheless, we are confident that Pharmaniaga remains a going concern and is well-poised to tap on the strong prospects of the pharmaceutical sector, domestically and regionally.

"We are supporting the management team to ensure a robust regularisation plan is in place to strengthen the company's balance sheet and progressively work towards the upliftment of the PN17 status," he added.

The plantation division was the strongest contributor to BHB during the year, with a pre-tax profit of RM729 million compared with RM345 million in 2021.

This was largely attributable to the gain realised on disposal of plantation land amounting to RM459 million.

The division, however posted a reduced operating profit of RM295 million as a result of lower fresh fruit bunch production, higher operating cost and unfavourable fair value movement of biological assets.

The trading, finance and investment division turned in a higher pre0tax profit of RM428 million compared with RM192 million last year.

Boustead Petroleum Marketing was a key contributor on the back of improved sales volume and increased average fuel prices.

The division also saw a higher share of results from Affin Bank Bhd, which benefitted from a gain on the divestment of Affin Hwang Asset Management Bhd.

The heavy industries division registered a loss of RM164 million.

This was attributable to lower contributions from both shipbuilding and ship repair activities, as well as the impact of an allowance for expected credit losses of RM28 million.

The property and industrial division registered a higher pre-tax profit of RM30 million, arising primarily from the sale of industrial lands in Bukit Raja and land held for development on Jalan Cochrane.

"Despite the challenges to our pharmaceutical division, we are encouraged by the fact that most of our other divisions recorded positive results for the financial year under review.

"This was driven by our dedicated focus to our Reinventing Boustead Strategy and we will continue to build on this to leverage opportunities to drive the sustainable growth of our core businesses, alongside unlocking value creation for the future," Izaddeen said.

BHB declared on Dec 29 2022 a first interim dividend of 1.5 sen per share. This will be paid on March 27 to shareholders on the register as at Feb 28.

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