28/04/2011 (Bloomberg) - TH Plantations Bhd. (THP), a Malaysian palm oil producer, said it expects higher output of fresh fruit bunches this year as more trees come to maturity.

The Kuala Lumpur-based company is targeting 504,901 metric tons of palm bunches this year from 463,949 tons in 2010 after applying fertilizers, Chief Executive Officer Zainal Azwar Zainal Aminuddin told reporters in Kuala Lumpur today. TH Plantations is “upbeat” over potentially higher yields, he said.

Malaysian palm oil producers reported improved earnings last year as rainfall caused by the La Nina weather event spurred a rally in crude palm oil prices. TH Plantations’ profit rose 66 percent to 89.5 million ringgit ($30 million) as revenue climbed to 366 million ringgit after fetching more for its edible oil and kernels.

“Prices of palm oil have been still buoyant, above our budgeted prices,” said Zainal. “If it continues to remain this stable, this strong, then obviously we may exceed last year’s” revenue, he said.

Palm oil prices on the Malaysian Derivatives Exchange have averaged at 3,561 ringgit a ton this year. The company had targeted 2,800 ringgit a metric ton as its base price for crude palm oil this year, Zainal said. That’s up from an average price of 2,715 ringgit in 2010, according to data compiled by Bloomberg.

Its shares closed unchanged at 2.20 ringgit today, after surging 45 percent over the past this year.

The company aims to expand its land bank to 50,000 hectares from the existing 39,113 hectares by 2012 and is looking at Malaysia’s eastern states of Sabah and Sarawak, and is also currently conducting feasibility studies to expand in Indonesia’s Sumatra and Kalimantan provinces, Zainal said.

It has allocated 150 million ringgit as capital expenditure for this year to develop plantations, replant palms and to partly fund the construction of a 60-ton capacity mill and housing complex in Sarawak, he said.