Boustead Plantations posts net loss of RM22.24mil in Q2 as CPO prices, production slip
23.08.2018 (The Star Online) - KUALA LUMPUR: Declining palm product prices and lower production resulted in a RM22.24mil net loss for Boustead Plantations Bhd
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in Q2 ended June 20,2018, compared to a net profit of RM10.78 mil in the previous corresponding quarter.
For the quarter under review, revenue dropped 16% to RM141.75mil from RM169.49mil in the same quarter in 2017.
With this latest result, Boustead Plantation has a total net loss of RM16.98mil in the first half of 2018 versus a net profit of RM40.34mil in the previous corresponding period as revenue dropped 17% to RM296.36mil.
In a stock exchange filing, the group said Peninsular Malaysia achieved a much a lower profit of RM10.7mil for the six-month period compared to RM33mil in the first half of 2017.
"The decline in profit of RM22.3 million or 68% was mainly attributed to the slump in prices of palm products, lower production and increase in operating expenditure. The region’s FFB crop of 169,867 MT was down from 2017 by 9%."
In Sabah, fresh fruit bunch (FFB) production rose over the quarter to 204,729 metric tonnes, 8% more than in the previous year. However, the downturn in prices and higher operating expenditure resulted in a loss of RM8.3mil versus a profit of RM31.3mil in the year-ago period.
Sarawak's production slipped 11% to 56,753 metric tonnes. Coupled with the impact of lower palm product prices, the region recorded a loss of RM13.3 mil as compared to a profit of RM1.9mil in the 2017 period.
The group said in its filing that it is "cautiously optimistic" that palm oil prices will pick up in the last quarter of 2018.
"The price direction for palm oil for the rest of the year is likely to be governed by the production trend from Indonesia and Malaysia, soyabean supplies, biodiesel offtake in Indonesia, Indian demand, development of US China trade tensions and its implications on prices of crude mineral oil," it said.
It added that the expected gains from its proposed sale of 138.89 hectares of Malakoff Estate will improve the group's profit for the year while the recently acquired Pertama estates will contribute to the group's crop production.