Latest Quarterly Results

Quarterly Report For The Financial Period Ended 30 June 2018

Financials Archive

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Unaudited Condensed Statement Of Consolidated Comprehensive Income

Unaudited Condensed Consolidated Statement Of Financial Position

Performance Review

For the second quarter of 2018, the Group recorded a pre-tax loss of RM26.2 million as compared with a profit of RM17.0 million for the corresponding quarter last year. The loss was attributed to the decline in palm product prices and lower production, particularly for the Peninsular region.

For the first six months of 2018, the unaudited pre-tax loss of RM18.4 million was down 131% from profit of RM59.4 million for same period last year. The reduction was mainly due to the sharp fall in selling prices of palm products and the increase in operating expenditure. Better production from existing Sabah estates and contribution from the recently acquired Pertama Estates, cushioned to a small extent the downturn in selling prices.

FFB production for the six-month period declined by 2% to 431,349 MT. OER averaged at 20.7% as compared with 20.8% for the corresponding period last year. The average KER of 4.4% was marginally higher than the rate for the corresponding period of 2017. CPO achieved an average selling price of RM2,457 per MT, down by RM512 per MT or 17% from RM2,969 per MT for the corresponding period last year whilst PK's average price of RM2,001 per MT, was down by RM619 per MT or 24%.

Peninsular Malaysia Region

Peninsular Malaysia region achieved a segment profit of RM10.7 million as compared with RM33.0 million for the six-month period ended 30 June 2017. The decline in profit of RM22.3 million or 68% was mainly attributed to the slump in prices of palm products, lower production and increase in operating expenditure. The region's FFB crop of 169,867 MT was down from 2017 by 9%.

Sabah region

Sabah region incurred a segment loss of RM8.3 million, down by RM39.6 million from profit of RM31.3 million for the corresponding six months of 2017. Although FFB production of 204,729 MT reflected an increase of 8%, the adverse impact of lower selling prices and higher operating expenditure led to the decline in profit.

Sarawak region

Sarawak region incurred a segment loss of RM13.3 million as compared with profit of RM1.9 million for six-month period of 2017. Besides the impact of lower palm product prices, FFB production of 56,753 MT was down 11% from the corresponding period last year.

Prospects for Rest of the Year

Crop production and selling prices influence the Group's profitability. For the current financial year, the expected gain from the proposed sale of 138.89 hectares of Malakoff Estate will uplift the Group's profit for the year.

While the Group's productivity is influenced by availability of labour and difficult operating conditions in Sarawak, the recently acquired Pertama estates will contribute towards the Group's crop production.

For the second quarter of 2018, CPO prices came under pressure due to lacklustre exports caused by the reinstatement of CPO export duty in May 2018 and the US-China trade conflicts which had led to a sharp drop in soy prices.

The price direction for palm oil for the rest of the year is likely to be governed by the production trend from Indonesia and Malaysia, soyabean supplies, biodiesel offtake in Indonesia, Indian demand, development of US China trade tensions and its implications on prices of crude mineral oil. The Group is cautiously optimistic that palm oil prices will pick up in the last quarter of 2018.

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