18/05/2011 (The Star) - Four plantation companies saw their net profits increased by leaps and bounds for the first three months of this year due to higher crude palm oil (CPO) prices despite lower fresh fruit bunches (FFB) production.

IOI Corp Bhd net profit for its third quarter ended March 31 rose 19.6% to RM656.7mil against the same quarter last year due to improvement in the group’s overall operating profit as well as increased contribution from jointly-controlled companies.

Revenue for the quarter improved by 37.8% to RM4.34bil. Earnings per share increased to 10.25 sen from 8.6 sen previously.

In a filing with Bursa Malaysia yesterday, IOI said the plantation division reported a 16% growth in operating profit to RM328.2mil compared with RM282.0mil in the same period a year ago.

The higher operating profit is due to improved CPO and palm kernel (PK) prices, partially offsetted by lower FFB production.

Average CPO and PK prices realised for the quarter were RM3,019 per tonne and RM2,772 per tonne respectively compared with RM2,480 per tonne and RM1,331 per tonne last year.

The group’s resource-based manufacturing division reported an operating profit of RM184.5mil for the quarter under review compared with RM128.6mil last year.

However, after excluding the changes in fair value on derivative contracts which amounted to a gain of RM99.1mil, the results of the resource-based manufacturing segment was lower than the same quarter last year, due mainly to lower margins from speciality fats and oleochemicals.

IOI property segment’s operating profit of RM137.3mil for the quarter was 10% higher than a year ago, mainly due to compensation of RM22mil received in respect of compulsory acquisition of land.

Cumulatively, IOI group’s nine-month net profit increased to RM1.67bil from RM1.49bil a year ago. Revenue for the period also escalated to RM11.83bil from RM9.48bil last year.

The higher profit was due to improved contributions from the plantation and property segments.

Meanwhile, United Plantations Bhd net profit for the first quarter ended March 31 soared 76% to RM86.1mil compared with the same quarter last year.

Revenue for the quarter jumped 52% to RM278.4mil while earnings per share increased to 41.37 sen from 23.5 sen last year.

The company said the positive result was due to higher production of CPO and PK by 15.5% and 11.2% respectively for the current quarter year-on-year, mainly due to newly matured fields coming into production from its estates in Indonesia.

“There is also significant improvement in the selling prices of CPO and PK by 42.8% and 93.7% respectively in the current quarter against last year,” it said.

In a separate announcement, United Plantations declared a final dividend of 20% per share less 25% tax or 15 sen net per share and a special dividend of 35% per share less 25% tax or 26.25 sen net per share for the year ending Dec 31, 2010.

The ex-date and entitle date for both dividends will be on June 30 and July 4 respectively.

Another plantation player, Astral Asia Bhd, posted a rise of 104.5% in net profit to RM1.3mil for its first quarter ended March 31 against the same quarter last year.

Year-on-year, its revenue for the quarter rose to RM10.7mil from RM8.7mil while earnings per share jumped to 1.08 sen to 5.3 sen.

The company said average CPO prices for the quarter increased by 36.1% to RM3,503 per tonne while FFB harvested decreased by 21.2% to 11,035 tonne from a year ago.

Glenealy Plantations (Malaya) Bhd net profit surged to RM23.2mil in its third quarter ended March 31 compared with RM10.1mil a year ago.

Revenue for the quarter increased to RM69.1mil from RM54.5mil while earning per share rose to 20.37 sen from 8.9 sen.

The group’s FFB production decreased by 10,918 tonnes to 76,893 tonnes compared with the preceeding quarter due to seasonal yield pattern. Glenealy achieved lower CPO sales of 17,901 tonnes compared with 21,192 tonnes previously.

However, quarter-on-quarter, CPO prices in the third quarter was higher at an average of RM3,595 per tonne compared with RM3,067.

“Palm oil production is expected to pick up in the next few months due to a recovery from biological stress experienced in the previous periods,” the company said.

“The fight for acreage between grains and oilseeds for the new planting season due to low stocks and high prices, strong crude petroleum price above US$100 per barrel, growing biodiesel mandates worldwide and replenishment of stocks by importing countries are supportive factors for palm oil price in the near term.”