KUALA LUMPUR (Feb 21): Boustead Plantations Bhd’s net profit increased 2.5% to RM87.28 million in the fourth quarter ended Dec 31, 2022 (4QFY2022) compared to RM85.13 million a year ago, due to a gain on partial disposal of land in Bukit Mertajam of RM91 million.

Excluding land disposal gain, Boustead Plantations' pre-tax profit was RM18.9 million due to lower palm product prices and higher operating cost caused by an increase in fertiliser and diesel prices as well as the minimum wage, the company said in a filing to Bursa Malaysia on Tuesday (Feb 21).

The group made a turnaround in the current quarter under review, from a net loss of RM352,000 in 3QFY2022, during which fresh fruit bunch production and palm product prices declined, while manuring cost rose.

Meanwhile, 4QFY2022 revenue fell 22.8% to RM263.58 million compared to RM341.49 million posted a year ago due to lower palm product prices.

For the full year (FY2022), Boustead Plantations reported a net profit of RM595.31 million, an increase of 145.8% from RM241.29 million in FY2021, driven by gains from the disposal of Kulai Young land, partial disposal of Bukit Mertajam land and government land acquisition at Telok Sengat Estate, which amounted to RM459 million.

Meanwhile, FY2022 revenue increased 12% to RM1.17 billion from RM1.04 billion a year earlier — Boustead Plantations’ highest revenue since its listing in 2014.

During the period, crude palm oil realised an average price of RM5,066 per metric tonne (MT), surpassing last year’s corresponding period of RM4,341 per MT. Palm kernel average price was also higher at RM3,156 per MT.

On the outlook, Boustead Plantations foresees prices of palm oil 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 Ukraine-Russia 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 a risk of global crop shortages,” the company said in the filing.

It added high production costs due to the impact of minimum wages coupled with higher fertiliser and diesel prices will continue to be a burden in the remaining year.

At 5pm, Boustead Plantations closed unchanged at 68 sen, giving the plantation company a market value of RM1.53 billion.