KUALA LUMPUR (Feb 18): Sarawak Plantation Bhd's net profit surged 7.4 times to RM8.68 million in the fourth quarter ended Dec 31, 2019 (4QFY19) from RM1.18 million a year ago, on higher revenue and gains arising from changes in fair value of biological assets of RM1.8 million in the current quarter compared with a loss of RM4.6 million in 4QFY18.

This resulted in a higher earnings per share of 3.11 sen for 4QFY19 compared with 0.42 sen for 4QFY18.

Revenue for the quarter also rose 22% to RM108.92 million from RM89.28 million a year ago.

The improved quarterly performance lifted the group's net profit for the full FY19 by 87.1% to RM20.92 million from RM11.18 million in the previous year, while revenue rose 11.8% to RM347.53 million in FY19 from RM310.79 million in FY18.

In a bourse filing today, Sarawak Plantation said its performance is largely dependent on palm oil prices, productivity, sales volume and operating costs.

"The recent hike in crude plam oil (CPO) price is mainly because of expected lower CPO production in 2020 and the lowest CPO stock by comparison to stock level within the past two years. Further, with the implementation of B30 in Indonesia, market generally expects stronger demand.

"In view thereof, the group expects 2020 CPO price will be higher than 2019," it said. Average selling prices of CPO increased by 30% year-on-year (y-o-y), while sales volume fell by 5.3% y-o-y in 4QFY19.

Sarawak Plantation added it will continue to strive for production improvements in FY20, with a focus on increasing productivity and ultimately to reduce unit cost of production.

"The board is confident that the group will achieve a promising result in the next financial year," it added.

Shares in Sarawak Plantation closed unchanged at RM1.75 today, bringing a market capitalisation of RM488.31 million.