PPB Group managing director Lim Soon Huat
KUALA LUMPUR: Diversified conglomerate PPB Group Bhd
sees the appreciation of the ringgit against the US dollar as a positive development for its operations, as this is expected to lower the cost of raw materials and increase consumer spending.
Group managing director Lim Soon Huat said the group’s raw materials are predominantly priced in US dollars.
"The strengthening of the ringgit benefits us because our raw materials, which are mostly imported, are priced in US dollars. This will help reduce our costs in ringgit terms, supporting our business,” he told reporters at the group’s briefing here today.
Lim also highlighted the importance of currency stability for better financial planning, rather than dealing with large fluctuations in the currency market.
In the consumer segment, Jeremy Goon, chief executive officer of PPB’s unit FFM Bhd, expressed optimism about demand in the coming months, particularly during the festive seasons.
"Consumer demand has not been as robust as expected, but we have seen a pick-up during festive periods. We anticipate stronger sales during upcoming festivities like Malaysia Day and the year-end holidays,” he said.
Despite rising business costs, particularly in wages, Goon expects the stronger ringgit to improve consumer confidence, potentially spurring spending.
"We acknowledge that certain segments, such as the palm oil business, might face challenges due to its pricing structure.
"In the palm oil business, costs are in ringgit, but products are sold in US dollars, so the stronger ringgit may not be as favourable for this segment,” he explained.
Lim said the group remains focused on driving marketing efficiency through its well-established sales and distribution network.
"We are expanding our product range and increasing our market presence to meet consumer demand,” he noted.
Addressing concerns over high marketing expenses in the first half of 2024 (1H 2024), Goon said the group had intensified promotional activities during that period but expects the second half to be more manageable.
"We will continue promotional efforts but anticipate higher sales volumes, which should offset marketing costs. Overall, we expect the consumer segment to perform better in the 2H 2024,” he said.
PPB Group is also optimistic about its overall performance for the remainder of 2024 and expects satisfactory results across all business segments, Lim added.
The group’s net profit for the second quarter ended June 30, 2024 (2Q 2024) increased to RM308.92 million against RM202.81 million in 2Q 2023, while revenue fell to RM1.32 billion from RM1.48 billion previously.
For 1H 2024, the group recorded a higher net profit of RM646.09 million versus RM580.35 million while revenue slipped to RM2.61 billion from RM3 billion previously, mainly due to the absence of contributions from its divested Indonesian flour operations in 2023. - Bernama
