20/11/2008 (The Jakarta Post) - Publicly listed plantation company PT Sampoerna Agro expects its palm oil fresh fruit bunches (FFB) production to decline by 23 percent this year, compared to last year, but is optimistic production will grow again next year, an executive says.

Chief financial officer Sie Eddy Kurniawan admitted Wednesday this year's production of FFB, which is processed into crude palm oil (CPO) and palm kernel, will decline from a year earlier as many of its new plantation areas are yet entering the production stage.

"The production of FFB will decline this year. Although we will still reach our output target for the full year," Sie Eddy told a media briefing.

Sampoerna Agro is engaged in the plantation and cultivation of palm trees and the processing of FFB into CPO and palm kernel. It manages 87,319 hectares of oil palm plantation and operates five CPO mills.

The company expects its FFB production to reach 900,000 tons by the end of the year, around 23.8 percent short of last year's output of 1.18 million tons.

During the January-September period, the company managed to produce 834,216 tons of FFB.

"But for next year, we are optimistic that production will return to normal and expand, as our new areas will start producing," Sie Eddy said.

During the briefing, the company also reported a 399 percent growth in its net profit in the first nine months of the year from a year earlier, from Rp 80.06 billion to Rp 399.53 billion, thanks to robust sales when prices were higher.

Total sales went up 117.1 percent to Rp 1.858 trillion, with crude palm oil making up more than 80 percent of sales volume, from Rp 856 billion the year before.

An equity research report from PT Bahana Securities showed that Sampoerna Agro's capital expenditure will be Rp 613 billion for 2008, Rp 696 billion for 2009 and Rp 805 billion for 2010.