Boustead Plantations records Q1 net profit of RM5.2mil
23/05/2023 (The Star Online), Kota Kinabalu - Boustead Plantations Bhd (BPlant) said its profitability for this year is dependent on the price direction for crude palm oil (CPO) and crop production.
“Palm oil production in the first quarter of 2023 had been adversely impacted by the heavy rainfall and flooding phenomenon in parts of Malaysia. However, CPO production is forecasted to trend higher in second half of 2023 following the expected improvement in weather condition in the months ahead,” BPlant said in a Bursa filing.
The plantation group said palm oil prices remained favourable in the first quarter of 2023 driven by lower production of other vegetable oil in Ukraine due to ongoing war with Russia, rising biodiesel demand and increase in edible oil imports by China, among others.
“Nevertheless, CPO prices are forecasted to weaken in the second half of 2023 due to expected higher CPO production season, high inventory level and subdue demand.
“The group is optimistic that the gradual return of foreign workers would lift the fresh fruit bunches (FFB) yield, which could partially offset the impact of lower CPO prices and rising costs,” BPlant said.
In a separate statement, it said average CPO price for the first quarter stood at RM4,017 per tonne, compared with last year's corresponding quarter’s RM6,030 per tonne.
Palm kernel's (PK) average price of RM2,126 per tonne was lower by RM2,529 per tonne. These price reductions adversely impacted the group's revenue in the current quarter.
BPlant posted net profit of RM5.2mil, or earnings per share of 0.23 sen from RM435.1mil, or 19.43 sen last year.
Revenue for the quarter was lower at RM199.7mil versus RM324.1mil a year prior.
It said the lower profit was due to the substantial downturn in palm product prices during the quarter under review and the negative effect on the valuation of FFB. Moreover, last year’s first quarter results benefitted from a gain on the disposal of the Kulai Young land.
BPlant has declared an interim single-tier dividend of 1.0 sen per share for the fiscal year ending Dec 31. This dividend is slated for disbursement on June 23, to all shareholders on the register as at June 9.
BPlant acting chief executive officer Fahmy Ismail said: “Despite the challenges in the industry and the slight reduction in production this quarter, we are encouraged by the resilience we have shown. A key aspect of our yield improvement initiatives is our ongoing replanting scheme, aimed at reducing mature areas and cultivating higher yielding trees, set to enhance our operational efficiency and profitability in the years to come.”
"As we continue to navigate the complexities of the palm oil industry, our strategic trajectory is defined by our yield improvement initiatives, along with progressive digitalisation and mechanisation initiatives. These strategic efforts are crucial in ensuring our sustained performance and growth over the longer term. Even as we adopt technological advancements, our commitment to exemplary standards of environmental, social, and governance (ESG) principles remains unwavering."