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Categories
| CBIP targets 10%-20% landbank growth every year |
| Business & Market 2009 | |||
| Written by Joy Lee | |||
| Monday, 15 June 2009 10:55 | |||
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“We have explored some options. We cannot reveal any concrete feedback at the moment but there are some in the pipeline. Whether or not they will be successful, we are still not sure. “But if possible, we will try to grow the landbank about 10% to 20% every year,” CBIP managing director Lim Chai Beng told The Edge Financial Daily. He said its land acquisition would quite likely be in Indonesia, where a bulk of its engineering business was based. Currently, its landbank totals about 14,000 hectares, all of which are in Sarawak. As of March 31, 2009, its cash and cash equivalents stood at RM17.78 million with a gearing ratio of about 0.3 times. “We are quite happy with our financial position. The earnings are there. We will try to gear up a little bit more and further expand the business,” he said. Lim said CBIP was looking at both new and existing plantations but added that it was tougher to acquire brownfields as it required intensive capital. At the moment, plantations contribute 20% to 30% to the group’s profit. For the first quarter ended March 31, 2009, CBIP’s net profit declined 8% to RM8.13 million from RM8.85 million a year earlier, due to the poor performance in the plantation segment resulting from the lower average selling price of fresh fruit bunches. Revenue rose 17.6% to RM77.02 million from RM65.48 million previously due to the additional sales generated by a newly acquired oil palm plantation and the improvement in project billing. On its engineering side, Lim said it was seeing a steady growth. “Demand is strong. We are quite bullish on this sector,” he said, adding that the group’s order book now totalled RM300 million and soon to rise to RM350 million, which would last it until the first quarter of 2011. He added that the company was looking to buy back more of its shares after carrying out a series of such buybacks in the second half of last year. It spent RM5.74 million to acquire about 1.2% of the company’s paid-up capital last year. “The price earnings ratio is so low. We want to buy out weak holders but it is dependent on the availability of funding,” he said. Lim said the crisis may affect its cash flow due to slow payments from the services side, but the company’s prospects seemed bright with an expected double-digit growth in profits this year. “The second quarter is seasonally better than the first quarter for the plantations. We are expecting more orders to come in for the engineering side. And there is a 5% to 10% increase in demand year-on-year for the services side. We are positive of a double-digit growth in profit,” he said. This article appeared in The Edge Financial Daily, June 15, 2009.
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