KUALA LUMPUR (Feb 21): On the back of higher crude palm oil (CPO) prices, Boustead Plantations Bhd clocked a revenue of RM1.1 billion for its financial year ended Dec 31, 2021 (FY21), 38% higher than the RM763 million recorded in the previous year and a record high since its listing in 2014.

Profit after taxation and zakat (PAT) surged to RM242 million, a sharp increase from RM34 million recorded in the same period the prior year. Profit before taxation and zakat (PBT) improved to RM345 million against RM83 million in the previous year, while profit from operations rose to RM391 million, according to a bourse filing on Monday (Feb 21).

Its annual profit attributable to ordinary equity holders of the parent stood at RM241.29 million for FY21, more than five times the Jan-to-Dec period the prior year.

Boustead Plantations registered an increase in PAT of RM86 million for its fourth quarter ended Dec 31, 2021, significantly higher than the RM27 million recorded in the same quarter the prior year. PBT climbed to RM137 million on the back of an improved revenue of RM341 million, with profit from operations rising to RM148 million.

Average CPO selling price increased by 16% to RM5,044 per metric tonne (MT) in the fourth quarter, from RM4,331 per MT in the third quarter as a result of a change in the marketing strategy embarked at the beginning of third quarter 2021.

“The continuous effort made to manage the production cost had led to the reduction in estate operating cost where there was a marginal reduction of 2%, from RM81 million in the third quarter to RM79 million in the fourth quarter,” it said.

Fresh fruit bunches (FFB) production stood at 248,328 MT while FFB yield was 3.6 MT per hectare. Oil extraction rate (OER) and kernel extraction rate (KER) stayed at 21.5% and 4.1% respectively.

Average CPO price for the fourth quarter increased by 52% from RM3,324 per MT recorded the previous year’s corresponding quarter. Average palm kernel price also jumped by 92% year-on-year to RM3,855 per MT from RM2,003 per MT. Meanwhile, OER increased by 2% from 21.1%.

During the year,  it said higher collection from customers, goods and services tax refund and deposit from disposal had improved net operating cash flows, which allowed the group to fund its FY21 working capital internally and pare down borrowings.

Cash generated from operations for the year improved to RM441 million in 2021 as compared to annual cash generated in 2020 of RM260 million.

Its debt-to-equity ratio stood at 0.37 times, reduced from Dec 31, 2020's position of 0.48 times. Likewise, the group’s net current liabilities as at Dec 31, 2021 stood at RM482 million, a reduction of RM129 million from RM611 million the prior year.

The board has declared a fourth interim single tier dividend of four sen per share for FY21 to be paid on March 22 to shareholders on the register as at March 11.

Its chief executive officer Zainal Abidin Shariff said the group is pleased with the performance despite the volatile economic landscape and limitations caused by the Covid-19 pandemic and labour shortage.

“Though our strong growth was driven by the high product selling prices, our elaborate yield improvement and cost management programmes had played a huge factor in contributing positively to our performance in the previous financial year,” Zainal Abidin commented.

“Palm oil is expected to maintain trading at higher price in view of prolonged labour shortage and weaker production due to recent heavy rainfall.

“In addition, Malaysia's end stock for the first quarter of 2022 is expected to stay at the low level due to weaker production.”

Zainal Abidin said the group remains optimistic about the oil palm industry following expected recovery from labour shortages situation and stability in supply and demand.

“The group remains focused on the current improvement initiatives in productivity, cost management and recruitment of local workers. In line with the Reinventing Boustead strategy, the group will increase its effort in 2022 to capitalise opportunities from mechanisation and digitalisation.

“Our aspiration is to transform Boustead Plantations into a sustainable technology-based plantation company by ramping up mechanisation and digitalisation efforts, while steadfastly upholding environmental, social and governance (ESG) principles throughout Boustead Plantations’s operation.”

Shares in Boustead Plantations closed down 1.5 sen or 1.56% to 94.5 sen, valuing the company at RM2.12 billion.