Keeping Track

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on May 18, 2020 - May 24, 2020.
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United Plantations Bhd

United Plantations’ principal business activity is the cultivation of oil palm and other plantation crops as well as processing the products.

For its first quarter ended March 31, the company recorded revenue of RM318.9 million, down 1% from the previous corresponding quarter. Operating profit before tax (PBT) stood at RM117.6 million, up 34.5% from the previous corresponding period. 

The company attributed the higher PBT to an increase in crude palm oil (CPO) and palm kernel (PK) production as well as higher CPO and PK prices. According to its latest results report, global vegetable oil prices have come under pressure from sharply lower mineral oil markets and uncertainty due to the Covid-19 pandemic. 

In the medium term, the company foresees negative economic consequences globally as the pandemic affects vegetable oil demand and prices. However, it is confident that it will be able to weather the storm without having to impair any major assets. 

The stock is trading at a price-earnings ratio of 17.58 times. It closed at RM25.20 on May 13, giving the company a market capitalisation of RM5.21 billion, according to Bloomberg.

Nestlé (M) Bhd

Nestlé is a multinational conglomerate and the world’s largest food and beverage company, according to its website.

For the first quarter ended March 31, the company recorded revenue of RM1.43 billion, which was marginally lower by 1.3% from the previous corresponding quarter. This was mainly due to slower domestic sales, which were partly affected by the Chinese New Year and impact of Covid-19, following the closure of restaurants, coffee shops and most other dine-in venues. 

Profit before tax fell 21.3% to RM246.3 million during the period. The company attributed the decline to lower sales.

Nestlé expects the disruptions caused by the pandemic to persist in the coming months, compounded by pressure from exchange rates and the higher prices of some commodities. In the near term, the company is adapting by capturing growth opportunities across all channels, including e-commerce acceleration. 

According to Bloomberg, the stock is trading at a price-earnings ratio of 52.05 times. It closed at RM138.50 on May 13, giving the company a market capitalisation of RM32.49 billion.