BLOCK­BUSTER GSC

PPB Group Bhd is not plan­ning to sell the prof­itable GSC Group. In­stead, it has al­lo­cated RM215 mil­lion to ex­pand the film ex­hi­bi­tion and distribution busi­ness.

New Straits Times - - Business - LIDIANA ROSLI bt@me­di­aprima.com.my

PPB Group Bhd has set aside more than half of its RM401 mil­lion cap­i­tal ex­pen­di­ture (capex) this year to ex­pand its film ex­hi­bi­tion and distribution busi­ness un­der GSC Group.

The di­ver­si­fied group, which deals in six busi­ness seg­ments in­clud­ing the flag­ship grains and agribusi­ness, also quashed ru­mours that it was sell­ing GSC.

Group man­ag­ing di­rec­tor Lim Soon Huat said while some par­ties had of­fered to buy the cin­ema fran­chise, PPB has no in­ten­tion of sell­ing.

“There had typ­i­cally been a lot of merg­ers and ac­qui­si­tions within the en­ter­tain­ment land­scape in Malaysia and we have been ap­proached be­fore by some par­ties look­ing to ac­quire GSC.

“But, I can con­firm that at this point, we are not sell­ing the unit as the busi­ness is do­ing re­ally good.

“In fact, within the group, GSC is the sec­ond-high­est profit con­trib­u­tor,” said Lim at a brief­ing, here, yes­ter­day.

GSC contributed RM59 mil­lion to PPB Group’s net profit last year, sec­ond only af­ter the grains and agribusi­ness at RM267 mil­lion.

For the year-ended De­cem­ber 31 last year, the group re­ported a net profit of RM1.11 bil­lion on a RM4.19 bil­lion rev­enue.

Lim said GSC’s op­er­a­tion would be ex­panded lo­cally and in the re­gion.

“For this year, we are al­lo­cat­ing RM215 mil­lion in capex for GSC from the to­tal RM401 mil­lion. This will mainly for the open­ing of three cin­e­mas in Malaysia and six in Viet­nam through our ex­ist­ing joint ven­ture with Galaxy Stu­dio JSC.”

The capex will also be used to­wards adding three screens at GSC Sum­mit USJ, up­grad­ing ex­ist­ing cin­ema equip­ment and in­vest­ment in Cam­bo­dia.

“We ex­pect to be­gin our Cam­bo­dian op­er­a­tions un­der the GSC brand by year-end upon the com­ple­tion of the mall the cin­ema will be lo­cated in,” said Lim.

He said PPB al­lo­cated be­tween US$5 mil­lion and US$6 mil­lion (RM26.73 mil­lion) a year for its film distribution seg­ment as the cur­rency ex­change ex­po­sure for GSC is min­i­mal.

The rest would go to grains and agribusi­ness (RM138 mil­lion), prop­erty divi­sion (RM24 mil­lion), other op­er­a­tions (RM14 mil­lion), con­sumer prod­ucts (RM7 mil­lion) and en­vi­ron­men­tal en­gi­neer­ing and util­i­ties (RM3 mil­lion).

“We are cur­rently pur­su­ing wa­ter and sewage treat­ment projects with an es­ti­mated value of RM600 mil­lion. I rather not say which projects we are bid­ding now, but we do have an ex­ist­ing or­der book of RM160 mil­lion,” said Lim.

Last year, the group com­pleted 18 sewage treat­ment plans un­der the Greater KL Sewage Scheme with a com­bined con­tract deal of RM96 mil­lion.

It also se­cured sewage net­work pump sta­tion projects val­ued at RM93 mil­lion in to­tal.

“We ex­pect the op­er­at­ing en­vi­ron­ment this year to re­main chal­leng­ing, es­pe­cially with the in­tense com­pe­ti­tion in the flour mar­kets in In­done­sia, Viet­nam and Malaysia. Do­mes­ti­cally, we ex­pect the feed mar­ket to be un­cer­tain with the rapidly evolv­ing in­dus­try land­scape,” he said.

PIC BY SHI­RAZ YASMINE ALI

PPB Group Bhd man­ag­ing di­rec­tor Lim Soon Huat (right) and di­rec­tor Datuk Ong Hung Hock at a press brief­ing in Kuala Lumpur yes­ter­day.

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