Menteri Pertahanan Mohamad Sabu melawat booth pameran syarikat Boustead Heavy Industries
BHB records net loss of RM469m in 2018, revenue at RM10.19b
KUALA LUMPUR: Boustead Holdings Bhd registered a net loss of RM469.2 million in the year ended December 31, 2018 against a net profit of RM436.2 million recorded a year ago.
In a filing to Bursa Malaysia today, the company said this was due to losses incurred in its heavy industries division.
It said the results from the other divisions, with the exception of the finance and investment division, were also weaker than financial year 2017.
Boustead said the bottom line for financial year 2017 was also bolstered by the profit on disposal of plantation land of RM554.9 million.
Its revenue in the same period decreased marginally to RM10.19 billion from RM10.24 billion.
The group expects 2019 to be another challenging year, on both global and domestic fronts.
Bosutead said nevertheless, the group’s diversified nature in six core areas of the Malaysian economy augured well for it.
It said the plantation division's prospects for the coming year will be challenging.
“However, the recognition of the gain on disposal of land in Seberang Perai Utara, upon completion, should boost earnings of the division,” it said.
Boustead said fresh fruit bunch (FFB) production for 2019 was projected to see some improvement from the slow production in 2018, supported by expected increase in crops from existing operations and the Pertama Estates.
The proposed acquisition of more than 4,000 hectares of mature fields and a palm oil mill in Sandakan, Sabah, upon completion in second quarter Q2 of 2019 will also contribute to the division's performance.
However, it expects production in Sarawak to remain weak given the operational difficulties there.
Boustead said during Q4 of 2018, crude palm oil (CPO) was traded at between RM1,710 and RM2,150 per tonne.
The CPO price is expected to climb towards RM2,400 per tone by early part of Q2 2019, in line with expected stocks drawdown.
“The biodiesel mandates of Indonesia, reduction of duty on crude and refined palm oil in India coupled with China’s positive outlook from the trade dispute with the US are some of the factors supporting CPO,” it said
Boustead to sell Royale Chulan Bukit Bintang hotel for RM197m
KUALA LUMPUR: Boustead Holdings Bhd (BHB) is disposing of the Royale Chulan Bukit Bintang Hotel in Kuala Lumpur to Singapore-listed Hotel Royal Ltd for RM197 million in cash.
In a filing with Bursa Malaysia today, BHB said the group was expected to realise an estimated gain of RM92 million on completion of the proposed disposal, translating into about 4.5 sen per share.
BHB's indirect subsidiary, Boustead Hotels & Resorts Sdn Bhd, today inked an agreement to sell the 418-room four-star hotel to Hotel Royal's subsidiary Every Room A Home Sdn Bhd.
A spokesperson from BHB said in a statement today that the disposal of this property formed part of the Boustead group’s overall plan to return to profitability by way of divesting non-strategic assets.
The Royale Chulan Bukit Bintang, located along Jalan Bukit Bintang, is facing increased competition within the Golden Triangle of Kuala Lumpur as well as online platforms such as Airbnb. This resulted in its relatively low occupancy rate of 52 per cent in 2018 versus the average occupancy rate of hotels within the Klang Valley of about 74 per cent, BHB said.
The company said that a refurbishment exercise would also be needed for the ageing property to remain attractive and competitive.
Weighing the prospects of maintaining the hotel, the sale offers greater value to the group.
The prime location of Royale Chulan Bukit Bintang Hotel enabled the group to dispose of the hotel at a premium over the net book value, BHB said.
The proposed disposal is, however, conditional on, among others, the buyer obtaining the approval of the Economic Planning Unit of the Prime Minister’s Department of Malaysia and the approval of the Federal Territory of Kuala Lumpur Land Executive Committee as well as completing all conditions and listing requirements imposed by the Singapore Exchange Securities Trading Ltd.
The proposed sale is expected to be completed by July 2019.
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