Thursday 28 Mar 2024
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KUALA LUMPUR (April 23): United Plantations Bhd's net profit declined 33.4% in the first quarter ended March 31, 2019 (1QFY19) to RM66.92 million from RM100.50 million in the previous corresponding quarter, dragged by lower average selling prices for crude palm oil (CPO) and palm kernel (PK).

Its weaker quarterly earnings was also because the previous corresponding period had recorded a gain of RM19.6 million due to the fair valuation of its commodity contracts.

United Plantations said in its Bursa Malaysia filing today that there was no such gain in the current quarter since the group started applying hedge accounting on the relevant commodity contracts since October 2018.    

As a result, earnings per share retreated to 32.21 sen in 1QFY19 from 48.37 sen previously.

Quarterly revenue stood at RM322.26 million, relatively flat when compared with last year's first quarter revenue of RM325.54 million.

On average, United Plantations said CPO and PK prices for the group in 1QFY19 were lower by 14.1% and 47%, respectively, compared with the year-ago quarter.    

Revenue contribution from plantations, which is a major segment of the group's revenue, grew 4.1% to RM172.4 million, mainly due to higher CPO and PK production in its Malaysian operations.

However, CPO and PK production in its Indonesian operations has decreased in the current quarter by 13.5% and 10% respectively, compared with the year-ago quarter.

Looking ahead, United Plantations said its results for 2019 will be lower than 2018, considering that palm oil prices are now at multi-year lows.

"Nevertheless, with the prices contracted under our forward sales policy and with our Indonesian production improving, coupled with large areas steadily coming into maturity from our replanted areas in Malaysia, the board of directors expects that the results will still be satisfactory," it said.

Shares of United Plantations closed down 12 sen or 0.43% today at RM27.52 with a market capitalisation of RM5.718 billion.

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