KUALA LUMPUR: Brahim's Holdings Bhd (BHB) says its deal with ANA Holdings Inc will help expand its halal in-flight catering business in Asia and the Middle East, and improve future earnings.
Founder and chairman Datuk Ibrahim Ahmad Badawi told Business Times it will also help diversify BHB's business and revenue stream.
"It's a new global market expansion of halal cuisine for BHB and it should translate into new earnings," he said.
Apart from in-flight catering at the Kuala Lumpur International Airport, BHB also operates airport FandB outlets, restaurant franchises and an upstream sugar refinery.
It also has secured contracts to supply halal foods to Jordan and Saudi Arabia.
For the first nine months of 2013, BHB posted a pre-tax profit of RM36.6 million on revenue of RM285.7 million.
The Japan-listed ANA is involved in air transport, in-flight catering and cabin services, operated via its units, All Nippon Airways Co Ltd and ANA Catering Service Co Ltd, at Narita International Airport and Haneda Airport in Tokyo.
Both parties inked a Collaboration Agreement yesterday to facilitate the strategic business alliance and explore ways where they could each draw on the inherent synergies of their respective businesses.
Hong Leong Investment Bank Bhd said the partnership may result in an incremental RM1.6 million operating profit for BHB, assuming simi-lar gross and operating profit mar-gin as its current catering business of 58.5 per cent and 18.5 per cent, respectively.
The research house maintained its "buy" call on BHB shares with a target price of RM2.13.
Alliance Research reiterates a strong "buy" recommendation with a target price of RM2.10 and earnings estimate under review, pending further details on the partnership with ANA.
Ibrahim said BHB will work closely with ANA Catering to tap the halal food markets in both Japan and Malaysia as well as in other Asian countries.
"We plan to develop halal Japanese-style curry for the company's Asian routes and establish a joint venture to supply halal inflight meals to the Middle Eastern foreign carriers from the Narita and Haneda airports," he said.
Yesterday, BHB closed at RM2.08, up 0.15 sen, with 3.85 million shares traded.