Chin Teck Plantations sinks into losses in 2Q

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KUALA LUMPUR (Apr 29): Chin Teck Plantations Bhd sank into losses during the second quarter ended Feb 28, 2015 (2Q15).

The plantation firm incurred net loss of RM486,000, compared with net profit of RM1.85 million in the previous corresponding period, partly because its harvesting activities were affected by the unrest in the villages near its plantations in Indonesia.

Revenue for the quarter contracted 21% to RM19.25 million, from RM24.43 million during the same period last year. This was a result of lower average selling prices of fresh fruit branches (FFB) and crude palm oil (CPO), and lower sales volume of FFB, CPO and kernel.

In a filing with Bursa Malaysia, Chin Teck said its losses came from its investment in oil palm plantations in Indonesia.

“As reported previously, the investment in oil palm plantations in Lampung Province, Indonesia encountered a suspension in routine harvesting due to unrest in the villages located in the vicinity of the plantations.”

“The plantations have commenced harvesting activities; however, the harvested areas are relatively small as at end of second financial quarter (2Q15),” said Chin Teck in the filing.

It said harvesting of newly mature fields in a joint venture plantation in South Sumatera, Indonesia has been delayed, because of unrest in the villages neighbouring the estate. Commencement of harvesting is pending clearance by relevant authorities.

For the cumulative six-month period, Chin Teck remains in a profitable position, despite declining 33% year-on-year (y-o-y) from RM15.15 million to RM10.13 million.

Revenue for its cumulative period stood at RM46.87 million, falling 21% y-o-y from RM59.38 million.

For the quarter, Chin Teck (fundamental: 1.65; valuation: 1.4) has a loss per share of 53 sen, but earnings per share of 11.08 sen for the six-month period. It proposed no dividend for the quarter.

Chin Teck’s share price closed at RM9.26 today, down 4 sen. This gives it a market capitalisation of RM846.02 million.

(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.)