This article first appeared in The Edge Financial Daily on May 24, 2017

KUALA LUMPUR: Innoprise Plantations Bhd reported a 300% year-on-year rise in net profit in the first quarter ended March 31, 2017 (1QFY17), amid higher crude palm oil (CPO) and palm kernel prices, and better sales volume as a result of higher fresh fruit bunch (FFB) production.

Net profit for 1QFY17 came in at RM9.34 million versus RM2.34 million a year ago, while revenue grew 18% to RM29.46 million from RM24.93 million.

The group proposed a first and final dividend of two sen per share in respect of FY16, to be paid on June 16 this year, subject to shareholders’ approval in the annual general meeting yesterday.

In a statement, the group said its board of directors has approved the adoption of a dividend policy with a payout ratio of between 50% and 70%, depending on the group’s liquidity position, as about 90% of its oil palm area has now reached the maturity phase.

In the same note, the company’s managing director Datuk Dr Kelvin Tan highlighted that Innoprise’s stellar 1QFY17 results were also due to the “excellent oil extraction rate of 23.76%” that Innoprise recorded during the quarter.

“Despite lingering lagged effects of 2016’s El Niño weather conditions, FFB crop increased 22% to 34,375 tonnes. For 2017, crop is expected to grow by double[-digit] percentage points. As our estate is primarily at [the] young mature age, we expect double-digit FFB crop growth for the next few years,” Tan said.

Innoprise shares grew 2.6% or three sen to settle at RM1.20 yesterday, giving it a market value of RM560.3 million.