KUALA LUMPUR: PPB Group Bhd is expected to perform better in the second half (H2) of its financial year underpinned by improved performance in its business divisions.
For starters, its Golden Screen Cinemas chain is ready to reopen with more screens after the acquisition of MBO Cinemas, which is expected to completed by the end of this month.
With the acquisition, UOB Kay Hian Research said GSC would continue to strengthen its lead position with close to 50% market share in Malaysia, from 40% previously.
The research firm noted that PPB is engaging with the relevant authorities to allow for the reopening of cinemas in the fourth quarter of this year.
It added that the recent acquisition would boost the film exhibition and distribution segment’s operating profit by 10% to 15% to pre-Covid-19 level.
As for the group’s consumer-related segments, it expected satisfactory performance as there were still some logistics and operational disruption in the first half of the year, especially in Klang Valley due to the Covid-19 situation.
“We expect the sales volume for the consumer-related segments (grains and agribusiness and consumer products) to be higher as compared with the first half of the year. This will also boost its new 500 tonne per day wheat flour mill by VFM-Wilmar Flour Mill which is expected to completed by the third quarter,” it said in a report yesterday.
PPB is confident that its supply chain management and procurement team will secure raw materials at better pricing.
Hence, the profit margin compression may come in lower than market expectation despite the huge spike in the commodity prices, it added.
Source: The Star
