KEY HIGHLIGHTS

  • Revenue lowered by 24% to RM 7.86 billion for FY2020
  • Loss After Tax and Zakat (LAT) for FY2020 stood at RM500.7 million, a reduction by 64% from LAT of RM1.39 billion in FY2019
  • EBITDA for the year stood at RM581 million, up by 28% from RM455.2 million in FY2019

 

KUALA LUMPUR, 31 MARCH 2021: Boustead Holdings Berhad (“Boustead” or the “Group”) recorded a lower Loss Before Tax and Zakat (LBT) of RM295.3 million for the quarter ended 31 December 2020 against LBT RM1.35 billion for the same quarter of FY2019.

In Q4 FY2020, the Group also had a significantly lower impairment of property, plant and equipment, right-of-use assets and goodwill at RM159.3 million as compared to RM1.14 billion in the same period in FY2019.

During the year ended 31 December 2020, the Group posted a lower LBT of RM420.3 million compared to LBT RM1.34 billion for FY2019 due to lower impairments and one-off losses recognised during the year. This was transacted into LAT of RM500.7 million, a reduction by 64% from LAT of RM1.39 billion in FY2019, while the Net Loss Attributable to Shareholders of the Company stood at RM550.9 million compared to RM1.28 billion in FY2019.

The diversified nature of the Group’s businesses, mainly from operations in Plantation and Pharmaceutical divisions, helped mitigate the impact of the COVID-19 pandemic which severely affected other parts of the business.

This was evident with the higher surplus from operations of RM249.4 million against RM59.9 million in FY2019. Meanwhile, Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at RM581 million, reflecting a 28% increase from the previous year.

In FY2020, Boustead posted revenue of RM7.86 billion, a 24% decrease from RM10.32 billion in FY2019 primarily due to lower average price and sales volume for fuel and variation in milestones achieved in the heavy industries business.

This was exacerbated by the adverse impacts of the COVID-19 pandemic on hotels, property and tourism-related businesses. Nevertheless, Plantation Division rebounded with a higher revenue on the back of improved palm product prices and Fresh Fruit Bunches (FFB) production.

 

Performance by Divisions in FY2020

Plantation Division

  • The Plantation Division has successfully attained profit before taxation (PBT) of RM83.3 million FY2020 compared to LBT of RM135.4 million in FY2019. The division also recorded an increase of 32% in revenue at RM763.0 million against RM577.2 million for FY2019. This was accomplished on the back of improved palm products prices and an increase in FFB production.

Pharmaceutical Division

  • The Pharmaceutical Division has returned to black in FY2020 after recorded a PBT of RM29.8 million after experiencing LBT RM207.0 million in the previous fiscal year. In FY2019, the bottom line was impacted by accelerated amortisation of rights to supply of RM247.3 million. The division’s revenue fared lower at RM2.73 billion compared to RM2.82 billion in FY2019, mainly due to soft demand from the concession business.

Heavy Industries Division

  • The Heavy Industries Division recorded a lower LBT of RM107.4 million compared to LBT of RM1.04 billion in FY2019 primarily due to the reduction in impairment of goodwill at RM36.1 million (FY2019: RM725.2 million). At the operational level, the Division posted a profit from operations of RM25.6 million, improved from a deficit of RM226.2 million in FY2019, mainly due to better contribution from the Littoral Combat Ships (LCS) project.

Property & Industrial Division

  • The COVID-19 pandemic and the restrictions of the Movement Control Order (MCO) have severely impacted the Property & Industrial Division, which closed the year with a higher LBT of RM343.2 million against LBT RM46.7 million for FY2019. This was further burdened by higher fair value losses on investment properties and impairment of property, plant and equipment (mainly hotel buildings).

Trading, Finance & Investment Division

  • The Trading, Finance & Investment Division recorded a deficit of RM82.8 million. This was mainly attributable to lower average fuel price and sales volume under Boustead Petroleum Marketing, as well as the effect of MCO on tourism-related businesses. Furthermore, an associate, Affin Bank Berhad, registered a lower contribution due to higher allowances for credit losses, higher operating expenses and a one-off modification loss relating to COVID-19 relief measures. The Division also recorded a higher fair value loss on investment properties and a one-off loss on measurement of Assets Held For Sale (AHFS) to Fair Value Less Cost of Disposal (FVLCD) on the proposed disposal of Boustead Cruise Centre (BCC), offsetting a gain recognised on disposal of an associate, Kao (M) Sdn Bhd.

Dato’ Sri Mohammed Shazalli Ramly, Boustead Group Managing Director said, “While the economic condition may be seen challenging for the Group’s performance, we are seeing a lot of positive news from our pharmaceutical and plantations businesses.

“We are working hard to resolve the key issues plaguing our heavy industries business within this year and with the Government’s Covid-19 vaccination programme currently underway, we hope that the tourism and property industries will slowly be reinvigorated,” he said.

Dato’ Sri Mohammed Shazalli said that Boustead is strongly focused on progressing its Reinventing Boustead which is a strategy to rejuvenate the Group and put it on a stronger footing over the next three years. This will involve:

  • value creation within Boustead’s existing core businesses
  • enhance core businesses through performance improvement programme
  • changing business models for new revenue sources
  • rationalising a few non-strategic assets, as well as
  • venturing into the digital services and technology sector

Commenting further, Dato’ Seri Mohamed Khaled Bin Nordin, Boustead Chairman said the COVID-19 pandemic and the implementation of the MCO had made FY2020 a challenging year for the Group.

“Despite the setbacks, Boustead has been making steady and promising improvements, and the Management of Boustead will continue to give unwavering focus in the Reinventing Boustead strategy by revamping our ways in executing businesses, capitalising on emerging opportunities and accelerating value creation.

“We are clear on the path we need to take to improve our business prospects and maximise the returns to our main stakeholders – the military contributors of Armed Forces Fund Board,” he said.

 

Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Group and certain plans and objectives of Boustead Holdings Berhad with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

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About Boustead Holdings Berhad

Boustead Holdings Berhad (‘Boustead’), one of Malaysia’s oldest conglomerates, is Lembaga Tabung Angkatan Tentera (‘LTAT’)’s investment arm. The diversified Group comprises more than 90 subsidiaries, associate companies and joint ventures, and has substantial interests in various sectors of the Malaysian economy.

Its operations are focused in five key areas namely plantation, heavy industries, property & industrial, trading, finance & investment, and pharmaceutical.

Since its inception as a modest trading entity more than 190 years ago, the Boustead Group has grown by leaps and bounds. As at 30 September 2020, Boustead Holdings Berhad’s paid-up capital was RM2.7 billion while its shareholders’ funds stood at RM3.5 billion. Market capitalisation is currently in the region of RM1.3 billion. For more information on Boustead, log on to www.boustead.com.my 

For more details, please contact Boustead’s Group Corporate Communications Department at gcom@boustead.com.my.