Thursday 28 Mar 2024
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KUALA LUMPUR (May 19): Boustead Plantations Bhd's net profit sank 75.6% to RM7.35 million or 0.46 sen per share in the first quarter ended March 31, 2015 (1QFY15) from RM30.13 million or 2.95 sen a year ago, due to a decline in fresh fruit bunch (FFB) production and low palm oil prices.

Revenue for 1QFY15 fell 33.6% to RM131.89 million in 1QFY15 from RM198.57 million in 1QFY14.

The group also declared a first interim dividend of 2 sen per share for the financial year ending Dec 31, 2015 (FY15), payable on June 30, 2015.

In a statement today, Boustead Plantations said average selling price for crude palm oil (CPO) for 1QFY15 fell 15% to RM2,236 per tonne from RM2,629 per tonne in 1QFY14. Average palm kernel price also fell 14.6% to RM1,662 per tonne compared with RM1,945 per tonne a year ago.

FFB production for 1QFY15 dropped 16% to 211,674 tonnes, mainly attributable to external factors such as unfavourable weather conditions in the previous year, as well as labour shortages and continuing blockades in certain Sarawak estates.

CPO production for 1QFY15 was 49,614 tonnes, while average oil extraction rate saw a slight improvement to 21.8% from 21.4% in 1QFY14.

Boustead Plantations vice chairman Tan Sri Lodin Wok Kamaruddin said the palm oil industry is impacted by bearish palm product prices and increasing supply of alternative vegetable oils.

“Market conditions continue to be tough. While the year ahead is expected to be challenging due to various pressures, what is important is that the group remains focused on strengthening operational efficiency,” he said in the statement.

In a filing with Bursa Malaysia today, Boustead Plantations said unresolved conflicts in certain Sarawak estates and the effects of dry weather conditions experienced last year are likely to pose challenges to FFB production for FY15.

“The key influences for 2015 will be Indonesia’s biodiesel demand, weather developments, Brent crude oil prices and the US dollar against the ringgit exchange rates,” it added.

In a separate filing, Boustead Plantations announced that it is disposing of three parcels of freehold land in Johor for RM48.99 million cash.

The group is selling one piece of land measuring 56.3ha to Seng Hong Quarry Sdn Bhd for RM29.09 million. The other two plots of land measuring a combined 31.97ha are being sold to Bentara Gemilang Industries Sdn Bhd for RM19.9 million.

Boustead Plantations said the disposals are expected to realise an estimated gain of RM38 million after taxation, which translates into a gain of approximately 2.4 sen per share for FY15.

“The proposed disposal is expected to improve the group's net assets and its subsidiaries by approximately 2 sen per share. Assuming that proceeds from the proposed disposal are used for repayment of borrowings, the gearing of BPB group is expected to be reduced by approximately 0.03 times,” it added.

The proposed disposals are expected to be completed by the fourth quarter of 2015.

Boustead Plantations shares closed unchanged at RM1.36 today, with a market capitalisation at RM2.18 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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