Latest Quarterly Results
Quarterly Report For The Financial Period Ended 31 December 2016
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Unaudited Condensed Statement Of Consolidated Comprehensive Income
Unaudited Condensed Consolidated Statement Of Financial Position
For the fourth quarter of 2016, the Group achieved an unaudited pre-tax profit of RM81.1 million. The profit was up by RM74.7 million from the corresponding quarter last year largely due to the gain on disposal of a Subsidiary. Better palm product prices compensated for the shortfalls in FFB production to contribute positively to the current quarter's profit.
For the year ended 31 December 2016, the Group's unaudited pre-tax profit of RM276.1 million was higher than the profit for the previous year by 190%. In addition to the gain on disposal of Subsidiary, the gain on disposal of plantation land and higher palm product prices supported profit.
The year's FFB production of 908,576 MT was down by 12% from 2015's crop of 1,037,163 MT. The shortfall in production was attributed to the adverse effects of the El-Nino phenomenon particularly in northern peninsular Malaysia estates, land disputes in Sarawak and labour shortage for the tall palms. The average oil extraction rate (OER) of 21.5% and kernel extraction rate (KER) of 4.4% was marginally lower than the same period last year.
CPO achieved an average selling price of RM2,584 per MT for the current financial year. This was an increase of RM436 per MT or 20% from RM2148 per MT achieved for the corresponding period last year. PK achieved an average price pf RM2,460 per MT, up by RM927 per MT or 60%.
Peninsular Malaysia Region
Peninsular Malaysia region achieved a segment profit of RM73.7 million as compared with RM35.3 million last year. The increase of RM38.4 million or 109% was attributed to higher palm product prices. FFB crop of 385,653 MT, was down from 2015 by 16%.
Sabah region registered a segment profit of RM72.2 million, which was approximately 2.5 times of last year's profit pf RM28.9 million. Higher palm product prices largely influenced the region's profit. FFB crop of 384,339 was down by 7% from last year.
Sarawak region incurred a segment profit of RM7.5 million for the year, an improvement from the loss of RM4.0 million for last year. The region recorded better selling prices for palm products but FFB production fell by 17% to 138,584 MT.
Prospects for the Coming Year
For the coming year, the Group is positive on crop production as the effects of El Nino are expected to taper off and the field blockades in sarawak will be closely monitored and kept in check.
CPO price surged to its highest in four years during the last quarter of 2016 and ended the year at RM3,218 per MT. Slower production, dwindling stocks, weaker Ringgit and higher crude mineral oil price lent support to the price. For the first half of 2017, improving demand from India and low based palm oil stocks should be supportive for palm oil price despite the shrinking support from China who appears to favour soybean oil consumption. However, as the El-Nino impact fades coupled with positive outlook for soybean crop in South America, the softening of palm oil prices is possible.