KUALA LUMPUR (Nov 22): Boustead Plantations Bhd (BPB) registered a net loss of RM352,000 or 0.02 sen per share for the third quarter ended Sept 30, 2022 (3QFY22) versus a net profit of RM95.56 million or 4.27 sen per share for 3QFY21 due to the decline in palm product prices and higher manuring costs.

Revenue reduced by 18.22% to RM240.25 million from RM293.77 million due to lower fresh fruit bunch (FFB) production following labour shortages and lower palm product prices.

In a filing with Bursa Malaysia, BPB declared a third interim dividend of 1.1 sen per share, to be paid on Dec 22.

"The profit from operations of RM1.4 million dropped substantially as compared to RM133.1 million achieved in the corresponding quarter last year," noted BPB.

According to the group, lower palm product prices also adversely affected the valuations of the FFB, crude palm oil (CPO) and palm kernel (PK).

Average CPO price for 3QFY22 decreased to RM4,089 per metric tonne (MT) from RM4,331 per MT in 3QFY21. PK's average price also slipped to RM2,494 per MT from RM2,541 per MT.

It said FFB production for the quarter of 227,335 MT was 14% lower than the production in the corresponding quarter last year of 263,276 MT, contributing a yield of 3.4 MT per hectare as compared with 3.8 MT per hectare in the corresponding quarter last year.

"Lower production was mainly attributable to lower crops in Sabah and Sarawak as a result of shortage of harvesters," said the group.

Its manuring cost rose to RM21.2 million from RM6.2 million due to an increase in fertiliser prices. Furthermore, BPB suffered a loss of RM11.9 million on FFB valuation in the quarter under review versus a gain of RM10.1 million previously as CPO prices plummeted.

For the cumulative nine months ended Sept 30, 2022 (9MFY22), the group's net profit jumped three-fold to RM508.02 million from RM156.16 million amid gain on disposal of Kulai Young land of RM364.1 million and gain on government land acquisition at Telok Sengat Estate of RM3.6 million.

Revenue for 9MFY22 expanded 28.92% to RM913.37 million from RM708.49 million.

Acting chief executive officer Fahmy Ismail said prices of palm oil are expected to remain highly volatile for the rest of the year as stock levels are expected to be high in Malaysia and Indonesia, as both countries are in the high crop season.

However, continuous Russia-Ukraine conflict and severe droughts and heatwaves in Europe, China, India and the US may lead to diverting demand towards palm oil due to price spikes of other crops which can potentially create the risk of global crop shortages.

"High production cost due to the impact of minimum wages coupled with higher fertiliser and diesel prices will continue to be a challenge in the remaining year.

"As we remain resolute to the Reinventing Boustead Strategy and enhancing shareholder value, the group commits to our reform initiatives in transforming BPB into a sustainable technology-based plantation company by ramping up mechanisation efforts, while steadfastly upholding the principles of environmental, social and governance in our operations," Fahmy added.

Shares of BPB closed at 67 sen on Tuesday (Nov 22) — down two sen or 2.9% — translating into a market value of RM1.49 billion.