PPB Group expects minimal impact from SST

KUALA LUMPUR: PPB Group Bhd, the company controlled by tycoon Robert Kuok, expects the justimplemented Sales and Services Tax (SST) to have minimal impact on its performance for the financial year ending Dec 31, 2018.

Managing Director Lim Soon Huat said its grains and agribusiness division, the major growth driver of the company, and the cinema business were both SST exempted.

“For instance, both imported wheat, for grains and agribusiness, and movie tickets are not subject to the tax,” he told reporters at a briefing on the company’s performance and outlook here yesterday.

Lim said while consumer sentiment might be affected post-SST, it would only be temporary and the company expected spending to resume before Chinese New Year.

“Other than the SST, external factors such as the US-China trade war and the problems faced by emerging countries are also affecting local consumer sentiment,” he said.

As for its property division, Lim said the SST would be favourable for developers as construction costs for residential properties were higher during the Goods and Services Tax regime.

The company hopes to launch 36 units of three-storey bungalows in Taman Tanah Aman, Seberang Jaya in Penang by year-end and was also on the lookout to increase its land bank.

Meanwhile, on the film exhibition and distribution division, Golden Screen Cinemas Sdn Bhd (GSC) Chief Executive Officer Koh Mei Lee said the company would deploy more ticket kiosks at 36 cinemas, nationwide, to overcome high labour cost.

“We will place four to eight kiosks at each of our 36 locations to gradually reduce the number of staff by the first quarter of 2019.

“Each kiosk will cost us between RM40,000 and RM60,000, with a payback period of between two and 2.5 years,” she said.

Koh said GSC’s labour cost accounted for 10 per cent of the company’s revenue, annually.

GSC enjoys a 60 per cent market share in the Klang Valley and about 42 per cent, nationwide.

As for the company’s environmental engineering and utilities division, the Managing Director of Chemquest Sdn Bhd, Leong Yew Weng said the division’s existing order book stood at RM329 million as at July 31, 2018.

The group’s water treatment services provider also expected to exhaust RM130 million of its order book by the end-2018.