“We are in talks to lease out our palm oil mill so that we can focus on our downstream business,” the Mesdaq-listed firm’s executive chairman and managing director Jang Kim Luang @ Yeo Kim Luang said. “To date (as of FY08), we have a total of RM6 million orders at hand.”
She said the high price of crude palm oil (CPO) in the first half of FY08 had sapped Ecofuture’s working capital due to its fresh fruit bunches (FFB) purchases.
“We lease it out and remove the headache, then we will have all the biomass we want and the steam to process it, which is free of charge,” said independent non-executive director Hiew Seng.
Meanwhile, Jang said Ecofuture expected its new product “Pulp-Eco”, which is a non-wood virgin pulp, to become one of its future growth drivers as it saw a huge market potential for this product in its overseas markets.
“Right now, we have a presence in Canada, the US, the UK, Australia, Taiwan, Japan and the Middle East,” she said.
Ecofuture’s net loss in FY08 widened almost three-fold to RM8.49 million from RM2.18 million a year earlier on the back of a 13.5% drop in revenue to RM94.53 million from RM109.28 million.
According to notes accompanying its financial statements, the company attributed its overall performance mainly to the inability to procure sufficient FFB for its milling business, which in turn affected its downstream biomass business segment.
The company had a debt to equity ratio of 2.51 times, a slight drop from 2.77 times a year earlier.
On the RM20 million total short-term borrowings that were repayable within one year, Jang said the company would negotiate with the banks to convert part of the borrowings to term loans. As at Dec 31, 2008, the company had a long-term debt of RM19.88 million, a slight increase from RM19.71 million in the previous year.
The company’s net asset per share as of Dec 31, 2008 was 10 sen, a decrease from 14 sen a year ago.
This article appeared in The Edge Financial Daily, May 26, 2009.