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No immediate price increase for PBB Group’s consumer products
Published on: Wednesday, September 06, 2023
By: Bernama
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Items produced by FMM Bhd’s wholly-owned unit. FMM is 80pc-owned by PBB Group. (The Star)
Kuala Lumpur: There are no immediate plans to increase prices of PPB Group Bhd’s consumer products amid the pricing volatility for commodities, said FFM Bhd chief executive officer Jeremy Goon.
He noted that the status quo on prices was due to the current weaker consumer sentiment as consumers were looking for more value-for-money products.
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“One of the products that has been contributing to that (lower sales) is the cooking oil segment.
“It is challenging to manage because there is a cooking oil subsidy scheme which affected not just our brands but also cooking oil brands across the board,” he said during a media and analyst briefing on PPB Group’s second quarter and the first half financial performance ended June 30, 2023, here.
FFM, which is 80 per cent-owned by PPB Group, is the largest flour miller in Malaysia and has interests in flour milling operations in Vietnam, Indonesia, Thailand and China.
The company’s wholly-owned subsidiary, FFM Marketing Sdn Bhd, markets a wide range of fast-moving consumer products under its own brands such as Anchor, Seri Murni and Massimo as well as other international and local brands.
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Asked about the blockage of the Black Sea grain corridor and the impact of sourcing wheat, Goon said the company was monitoring the development in the area and also diversified the source of import.
“We had some earlier shipments this year but not in the coming months. (In terms of sourcing) It is not that much. It is about 20 per cent,” he said.
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Goon also said that the company had not experienced a large volume decline in cooking oil in the first half of the year as it lowered the prices to not more than 10 per cent in order to compete with the subsidised cooking oil in the market.
He noted that there were no consultations made with cooking oil brands with regard to the cooking oil subsidy.
For the second quarter that ended June 30, 2023 (2Q FY2023), PPB Group’s net profit fell to RM202.81 million from RM693.41 million last year.
Its revenue also decreased to RM1.48 billion from RM1.54 billion previously, mainly attributable to the lower contribution from Wilmar International Ltd by 77 per cent to RM139 million in 2Q FY2023.
PPB Group managing director Lim Soon Huat said Wilmar’s performance is expected to improve in the second half of the year.
He added that Wilmar would continue to expand and its earnings would continue to grow in the future.
“At the same time, we are also growing our core business here. We are expanding our mills and our consumer products business.
“We also ensure that our cinema business stays as a market leader in Malaysia,” said Lim.
The group has a 20 per cent share of Wilmar’s operations in China and expects stable consumer spending in China as the cost of raw materials has started to stabilise, he added.
“In the first half of the year, it had faced lower sales as well as higher costs from the raw materials, which affected profit margins.
“We are seeing an improved performance in China (for the second half of the year),” said Lim.
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