Friday, 9 March 2012

Boustead sees profit hitting RM1 b in next 2 years

KUALA LUMPUR (March 9): BOUSTEAD HOLDINGS BHD [], which staged a remarkable performance last year, sees its profit breaching the RM1 billion level within the next two years.

“Last year was a record year for us. My personal target is that we’ll breach the RM1 billion profit level within the next two years. It could be this year or next year,” said its deputy chairman/group managing director Tan Sri Lodin Wok Kamaruddin.

To achieve the target, Lodin said Boustead would remain focused on the six core business activities namely PLANTATION []s, financial services, property, manufacturing and trading, pharmaceuticals and heavy industries.

For its financial year (FY) ended Dec 31, 2011, Boustead posted a pre-tax profit of RM831 million, a rise of 14.43 per cent from the RM726.2 million recorded for the previous year.

He expects the company’s plantation division to be the major contributor to its profit for the current year with heavy industries also contributing substantially.

“We also believe that the pharmaceuticals and financial services divisions can be good contributors to the group,” Lodin told Bernama in an interview.

However, he stressed the importance of sustaining profits for the company.

“I believe the price of crude palm oil (CPO) will be sustainable at the current level of around RM3,200 per tonne. It will be another good year for us. The plantation sector contributed about 40 per cent to the group’s profit last year.

"We expect similar or higher contribution from the division this year if the price of CPO remains at the level,” he said.

As for the heavy industries division, he expects it to perform well for the current year with the contract to build six units of the second-generation patrol vessels.

He expects the division to contribute more than 10 per cent to the group’s profit for the current financial year.

The heavy industries division posted a breakeven for FY 2011 compared with a profit of RM146.2 million for the previous year due to cost escalations in commercial shipbuilding projects and higher finance charges.

Lodin said the group’s financial services sector, which recorded good profit for FY 2011, would continue to perform well in the current year.

“To achieve the targeted profit, other entities must be well-managed professionally in the most cost-effective way with good corporate governance in place,” he added.

According to him, the group’s manufacturing and trading division would also continue to record good performance for the current financial year. The divison's pre-tax profit increased in FY 2011 with BHPetrol contributing significantly.

He said BHPetrol, with about nine per cent market share, had been recording revenue growth of about seven per cent annually. BHPetrol now has 330 service stations throughout Malaysia.

Lodin also said the group’s property division, which posted a higher profit for its FY 2011 compared to the previous year, would continue to record a remarkable performance.

He said the group’s four hotels are currently recording occupancy rates of between 60 per cent and 90 per cent. The four hotels are Royale Chulan in Kuala Lumpur and three, under the brand name of Royale Bintang, located at The Curve in Petaling Jaya, Jalan Bukit Bintang in Kuala Lumpur and in Seremban.

“All our hotels except Royale Chulan are profitable. We expect Royale Chulan to break even or record a small profit this year. Its occupancy rate is improving, now it is close to 60 per cent,” he said.

Another two hotels are under CONSTRUCTION [] -- Royale Bintang in Penang and Royale Bintang Cherating, expected to open for business in the middle of 2013 and early 2014 respectively.

Boustead also manages a small hotel, Royale Aryani in Terengganu. - Bernama

Get your T+10 interest FREE margin trading account NOW. Attractive brokerage for online trading. Contact Mr Ho at +603-5192 0808 or for more details.
Related Posts Plugin for WordPress, Blogger...