12/28/2004 BUSINESS TIMES (MALAYSIA) - SARAWAK Oil Palms Bhd (SOP) hasformed a joint-venture company with Sarawak Economic Develop ment Corp(SEDC).

The joint venture, SOP Karabungan Sdn Bhd, will develop 2,023ha in Niah,Sarawak, into an oil palm plantation.

SOP told Bursa Malaysia Bhd on Thursday it will have a 70 per cent stakein the joint venture, while SEDC will hold the remaining interest.

SEDC is injecting the land into SOP Karabungan for a total considerationof RM6.5 million in exchange for RM500,000 cash from SOP, RM3 million cashfrom SOP Karabungan and an allotment of three million shares of RM1 eachin the joint venture.

SOP, on its part, will subscribe to seven million ordinary shares of RM1each for a consideration of RM7 million. Meanwhile, in a separateannouncement yesterday, SOP said for the nine months ended September 302004, net profit fell to RM22 million on the back of a RM114.35 millionrevenue, as compared to RM36.13 million net profit on the back of aRM73.63 million revenue in the same period previously.

Earnings per share remained unchanged at 5 sen per share.

For the third quarter under review, net profit was RM7.31 million comparedto RM9.47 million before, while revenue was higher at RM40.39 million asagainst RM34.59 million in the third quarter of 2003.

The improvement in the group's revenue was mainly due to higher crude palmoil (CPO) production and stronger CPO and palm kernel prices.

The lower profit this time around was attributed to the exceptional gainfrom the disposal of Keresa Plantations Sdn Bhd of RM16.24 million in2003.

The performance of the group for the year is largely dependent ondevelopments in the world edible oil market and their corresponding effecton CPO prices, the company said.

"Assuming that CPO and palm kernel prices stay at current levels, thegroup is expected to maintain its performance for the remainder of theyear," it said.