June 18 2004 - CRUDE palm oil (CPO) prices may rebound to RM2,000 a tonneby year-end, due to good demand globally and low stockpile of the world’sother 16 edible oils.

Kumpulan Guthrie Bhd group chief executive Datuk Abdul Wahab Maskan saidCPO prices have the potential to rebound in the next few months.

I do not think prices will go down any more. The sudden drop last monthwas just temporary. Do not over-react on short-term disturbance, AbdulWahab told reporters in Kuala Lumpur yesterday after the company’s annualgeneral meeting.

CPO prices have fallen 21 per cent to hover at RM1,500 a tonne fromRM1,900 a tonne in January, mainly due to fears that China would freezebank loans to its edible oils importers as part of its efforts to slowdown its sizzling economy.

Whether it could reach RM2,000 a tonne is anybody’s guess but we are happyenough if it touches RM1,800 or RM1,900, said Abdul Wahab who took overthe company six months ago.

On the future direction of Malaysia’s oldest planter, he said the companywould now focus on going downstream as well as add value to its propertysector to enhance shareholders value.

We could go into the oleochemical business as there are players out therewho want to forge an alliance with us but we have to study first on itsviability, he said.

On earnings outlook, Abdul Wahab said the group is unlikely to registerlower earnings this year due to the higher prices of CPO coupled withbetter yields of its oil palm estates in both Malaysia and Indonesia.

For the financial year ended December 2003, Guthrie made a net profit ofRM138.2 million on the back of a RM3 billion revenue.

Abdul Wahab added the company is looking to sell its non-core businessesby year-end to focus on plantations and property. About 20 per cent of itsprofit is contributed by its property sector while plantations make up therest.

Its non-core ventures include the Guthrie Corridor Expressway in BukitJelutong, its rubber glove-making and rubberwood furniture businesses.

On the listing of its Minamas Plantations in Indonesia, Abdul Wahab saidthe company is deferring the plan until a suitable time.

The group owns more than 300,000ha of oil palm estates, of which 106,048haare in Malaysia and 216,023ha in Indonesia.

On its restructuring plan which would see Highlands & Lowlands Bhd andGuthrie Ropel Bhd becoming wholly-owned subsidiaries of Kumpulan Guthrie,Abdul Wahab said the plan is on track and should be completed by year-end.

The Securities Commission approved the plan three months ago.

He said Kumpulan Guthrie’s 54.7 per cent-owned property arm, GuthrieProperty Development Holding Sdn Bhd, would be listed by August orSeptember this year.

At present, Kumpulan Guthrie is a 73.2 per cent subsidiary of PNB. Thiswill be reduced to 62.3 upon completion of the rationalisation plan. PNBowns a 57.8 per cent stake in Guthrie Ropel and 54.5 per cent of Highlands& Lowlands.

At the market close yesterday, Guthrie shares were 10 sen higher at RM2.32with almost 20,000 shares traded.