Sourced from the New Straits Times
KUALA LUMPUR: Boustead Plantations Bhd posted a net loss of RM352,000 for its third quarter (Q3) ended Sept 30, 2022 versus a net profit of RM95.56 million in the same period last year.
This was due to abrupt drop in palm product prices and higher manuring cost experienced during the quarter under review.
The company said lower palm product prices had also adversely affected the valuation of the fresh fruit bunch (FFB), crude palm oil (CPO) and palm kernel (PK).
Its revenue dropped 18.2 per cent year-on-year (YoY) to RM240.25 million from RM293.77 million a year ago due to lower FFB production and palm product prices.
Average CPO price for the third quarter of RM4,089 per tonne was lower than the corresponding quarter last year of RM4,331 per tonne.
PK’s average price of RM2,494 per tonne was also lower than the corresponding quarter last year of RM2,541 per tonne.
FFB production for the quarter of 227,335 tonnes was 14 per cent lower than the production year ago of 263,276 tonnes, contributing a yield of 3.4 tonne per hectare as compared with 3.8 tonne per hectare in the corresponding quarter last year.
For the cumulative nine-month, Boustead Plantations’ net profit jumped 225.3 per cent YoY to RM508.02 million from RM156.16 million in the corresponding period last year.
Its revenue rose 29 per cent to RM913.37 million YoY from RM708.49 million.
This included the gain on disposal of Kulai Young land and gain on government land acquisition at Telok Sengat Estate which amounted to RM368 million.
Acting chief executive officer Fahmy Ismail remained optimistic of Boustead Plantations’ ability to perform in the upcoming quarter, driven by proactive mechanisation efforts and improvements of the Plantation Performance Improvement Programme (PPIP).
“Our Peninsular Malaysia and Sabah regions have shown positive outcomes in FFB yield as a result of continuous improvement through the implementation of PPIP.
“As we embark on the enhanced PPIP 2.0, we remain hopeful that the efforts undertaken will diffuse the impacts coming from market uncertainties,” he said.
The company declared a third interim single tier dividend of 1.1 sen per share for the year ending December 31, 2022.
The dividend will be paid on Dec 22.
On market prospects, Fahmy said prices of palm oil was expected to remain highly volatile for the rest of the year as stock levels would be high in Malaysia and Indonesia as both countries were in the high crop season.
“However, continuous Ukraine-Russia conflict and severe droughts and heatwaves in Europe, China India and the US may lead to divert demand towards palm oil due to price spikes of other crops which can potentially create a risk of global crop shortages.
“High production cost due to the impact of minimum wages coupled with higher fertiliser and diesel prices will continue to be a challenge in the remaining year.
“Nonetheless, the group is confident that its ongoing efficient cost management and crop improvement initiatives will deliver positive outcomes,” he said.