Boustead hopes to deliver sustained earnings growth this year

Boustead Holdings Bhd hopes to continue to deliver sustained earnings growth this year despite flagging economy, Deputy Chairman and Group Managing Director Tan Sri Lodin Wok Kamaruddin said. He said the group had allocated RM700 million for capital expenditure to further strengthen all its six divisions, with the focus on pharmaceutical, property and plantations. "We expect all the six divisions to further improve their business models where necessary, and tighten weak points, be it via divestment or restructuring," he told reporters after the conglomerate's annual general meeting here today. He said Pharmaniaga Bhd, one of the company's star performers last year, is expected to add value to the division's prospects in 2015 as it capitalises on the growing healthcare needs. Lodin said with a capital expenditure of RM40 million set for the division, Pharmaniaga would expand not only its government concession business but also its own locally and regionally. "In fact, with the EU certification, it will enable us to expand our business into the Middle East and Europe," he said. He said Pharmaniaga, which posted a pre-tax profit of RM100 million last year, aimed to expand its facilities to at least 10 from four at present and add more business alliances with other operators from 27 at present. On the property segment, Boustead Group will be developing a property project, involving a high-rise building and the four-storey MyTOWN Shopping Centre in Jalan Cochrane. The group will also further develop the Taman Rini Mutiara township, Johor which has RM1 billion gross development value. As for its plantation segment, the group plans to expand its landbank by another 20 per cent within two to three years from the current 83,400 hectares. Lodin said despite slowing down of crude palm oil (CPO) imports from two of Malaysia's biggest consumers, China and India, the prices of the CPO would likely move between RM2,600 and RM2,700 per tonne this year. This is due to the decline in the inventory level which currently stood at 1.7 million tonnes from 2.17 million tonnes few months ago, he added. Meanwhile, Boustead Group is also looking at the possibility of disposing a few its businesses that were not contributing significantly to the group's revenue, including a company producing building materials. For the financial year Dec 31, 2014, Boustead Holdings registered a pre-tax profit of RM686 million on the back of a revenue of RM10.6 billion. It declared a full year net dividend of 26 sen per share with a total payout of RM269 million. For more business news, tune in to Awani Biz starting 16 April at Astro channel 501.