Boustead Plantations's Q1 net loss narrows to RM9.55mil, revenue up
02.06.2020 (New Straits Times Online) - KUALA LUMPUR: Boustead Plantations Bhd's (BPlant) net loss narrowed to RM9.55 million in the first-quarter (Q1) ended March 31, 2020, from a net loss of RM16.20 million a year ago.
In an exchange filing today, BPlant said this was mainly due to the higher palm product prices for the quarter and reduction in depreciation charges as a result of the impairment made for the Boustead Pertama and Boustead Tawai assets in the preceding quarter.
BPlant's Q1 revenue increased 20.6 per cent to RM162.69 million from RM134.91 million on the back of higher crude palm oil (CPO) realised an average selling price of RM2,793 per metric tonne and palm kernel at RM1,700.
The company expects 2020 to be challenging for many industries due to the world outbreak of Covid-19 pandemic.
"The rapid spread of Covid-19 in the final weeks of the first quarter has exerted a ravaging impact on most commodities including palm oil, pushing down global demand and suppressing commodity prices precipitously."
It added that the Malaysian palm oil industry was also affected by the outbreak of Covid-19 following the slow demand from both the palm oil importing countries as well as domestic consumption.
"The Movement Control Order has interrupted the normal oil palm operational activities such as fertilising, harvesting, collection of fresh fruit bunch and milling.
"Shortage of harvesters and logistic issues have hampered the palm oil production."
BPlant warned that there could be a recession in the second half of the year should the spread of Covid-19 cannot be contained, which will put further downward pressure on the price of palm oil.
"We expect to record some growth in crop production with an improved operational efficiency but the uncertainty of recovery from Covid-19 may dampen the progress," it said.