KUALA LUMPUR (May 23): Boustead Plantations Bhd's net profit for the first quarter ended March 31, 2022 (1QFY22) surged to RM435 million from RM12 million a year prior due to higher palm product prices paired with improved fresh fruit bunch (FFB) production.

Revenue climbed 88.53% to RM324 million from RM172 million in the corresponding quarter last year, its bourse filing on Monday (May 23) showed. Earnings per share came in at 19.43 sen, compared with 0.55 sen previously.

With the strong performance, Boustead Plantations' board of directors declared a first interim dividend of 7.3 sen per share for FY22 ending Dec 31, 2022. The dividend will be paid on June 24, 2022 to shareholders on the register as at June 9, 2022.

The group attributed the significant increase in revenue and profitability to the rise in palm product prices over the one-year period to March 31.

"For 1QFY22, average crude palm oil (CPO) price surged by 61% to RM6,030 per metric tonne (MT), as opposed to RM3,751 per MT in last year's corresponding quarter.

"Average palm kernel price was also substantially higher at RM4,655 per MT, up by RM2,135 or 85%," Boustead Plantations said in a statement.

It added that the improved FFB production from the success of the Plantations Performance Improvement Programme (PPIP) further complemented Boustead Plantations' performance. 

"FFB production for the quarter was recorded at 195,882 MT, which was 9% higher from the production in last year's corresponding quarter of 180,165 MT. Oil extraction rate and kernel extraction rate grew to 20.6% and 4.1% from 20.3% and 4% respectively," Boustead Plantations said.

The group's chief executive officer Zainal Abidin Shariff said Boustead Plantations was encouraged by the bullish trend and encouraging crop production in 1QFY22, and therefore continued to focus on PPIP's initiative on mechanisation and digitalisation in line with the Reinventing Boustead Strategy.

"Through mechanisation, we have reduced the number of workers required for our operations. Compared with the same quarter last year, we had closed the gap by 30%.

"The group expects to further improve productivity and realise more benefits in the coming quarters from efforts on mechanisation to take advantage of the strong CPO price," he said.

Boustead Plantations foresaw that palm oil prices are expected to remain strong for the remaining 2QFY22 in respect of the ongoing Ukraine-Russia conflict and the tightness of CPO production that would dampen the increasing demand of edible oil.

It said the palm oil supply is expected to improve over the second half of the year due to easing of labour shortages with the entry of foreign workers back to Malaysia. 

Having said that, the group is aware that the sentiment on Indonesia lifting the ban on export of palm oil products will add bearishness to the palm oil prices.

On Monday, Boustead Plantations shares finished two sen or 1.94% lower at RM1.01, giving it a market capitalisation of about RM2.26 billion.