KUALA LUMPUR (Nov 23): Boustead Plantations Bhd delivered an improved performance for the third quarter ended Sept 30, 2020, posting a net profit of RM17.97 million compared with a net loss of RM34.31 million a year earlier.

Quarterly revenue increased 48% to RM205.68 million from RM139.24 million in the corresponding quarter last year.

The group said in a stock exchange filing that the improved results were driven by higher crude palm oil (CPO) prices and fresh fruit bunch (FFB) output.

It said CPO prices during the quarter averaged RM2,722 a tonne, up 37% from the RM2,026 a year earlier.

FFB production, meanwhile, increased to 273,625 tonnes from 239,572 tonnes, with the FFB yield improving to 4.1 tonnes per ha from 3.3 tonnes.

However, the group’s oil extraction rate (OER) declined to 21.2%, from 21.9% in the corresponding quarter last year.

Boustead Plantations said for the nine months ended Sept 30, the group’s net profit totalled RM15.5 million, down 46% from RM28.72 million in the corresponding nine months last year.

This was despite revenue rising 34% at RM398.1 million, from RM137.33 million previously.

Boustead Plantations said its prospects for the rest of the year would be driven by CPO prices, crop production and the successful execution of its transformation programme.

It noted that CPO prices are to remain supportive, with steady demand for palm oil seen from China, India, Europe and Pakistan.

The strong global demand and lower-than-expected production, it said, are expected to keep Malaysian palm oil inventories extremely tight.

“Weather developments are becoming a major determining factor for CPO and other vegetable oil prices in the remaining quarter of this year, particularly with the current La Nina weather pattern. Recent downward revision of crop estimates for soybean, sunflower seed and other oilseeds triggers heavy buying and elevates CPO price to the RM3,000 zone.

“The recent surge in global Covid-19 cases may need to be closely watched, as this could significantly reduce global demand, particularly from hotels, restaurants and catering (HORECA) sectors,” the group added. 

Boustead Plantations’ share price finished 1.68% or one sen higher at 58.5 sen today, valuing the group at RM1.31 billion. The counter saw seven million shares traded.