Latest Quarterly Results

Quarterly Report For The Financial Period Ended 30 September 2017

Financials Archive

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Unaudited Condensed Statement Of Consolidated Comprehensive Income

Unaudited Condensed Consolidated Statement Of Financial Position

Performance Review

For the third quarter of 2017, the Group achieved an unaudited pre-tax profit of RM599.1 million as compared with RM50.2 million for the corresponding quarter last year. The profit rose by 1,094% mainly because of the exceptional gain on disposal of plantation asset of RM554.9 million.

For the first nine months of 2017, the Group's unaudited pre-tax profit of RM685.0 million was up by 240% from last year's corresponding period. Excluding the gain on disposal of plantation asset of RM554.9 million (2016: RM124.2 million), the profit was an improvement of 68% from 2016. The profit was largely contributed by better CPO prices.

FFB production for the nine-month period increased by 5% to 696,668 MT. The increase in crop was largely attributed to improvement in yields post El-Nino in the 1st half year of 2017. OER averaged at 20.9% as compared with 21.5% for first nine months of 2016. The average KER of 4.3% was marginally behind the rate for last year.

CPO achieved an average selling price of RM2,871 per MT for the nine-month period this year, an increase of RM396 per MT or 16% from RM2,475 per MT from the corresponding period last year whilst PK achieved an average price of RM2,478 per MT, up by RM183 per MT or 8%.

Peninsular Malaysia Region

Peninsular Malaysia region achieved a segment profit of RM76.6 million as compared with RM47.0 million year-on-year. The increase in profit of RM29.6 million or 63% was mainly attributed to improved selling prices of CPO. The region's FFB crop of 305,713 MT was up from 2016 by 10% and this was attributed to improved production from the northern estates and the young palms on the east coast,

Sabah region

Sabah region achieved a segment profit of RM58.7 million, up by 24% from RM47.2 million profit year-on-year. FFB production of 294,243 MT reflected a year-on-year surplus of 4%. This was impacted by lower than expected production in the current quarter due to erratic weather conditions and frequent turnover of workers.

Sarawak region

Sarawak region registered a segment profit of RM5.2 million as compared with RM1.1 million year-on-year, The improved profit was mainly contributed by better selling prices of palm products. The region produced 96,712 MT of FFB, down 3% from the same period last year.

Prospects for Rest of the Year

The Group's profitability is dependent on the price direction of CPO and crop production. Although Peninsular Malaysia and Sabah regions have shown some improvements in FFB yields, the erratic weather conditions and labour shortage coupled with difficult ground conditions in Sarawak may dampen crop production. For the current financial year, the gain on disposal of plantation of RM554.9 million should contribute significantly to profits.

To-date CPO prices have outperformed expectations as production recovery was not as strong as expected after 2015/2016 El-Nino. September CPO stockpiles rose to their highest since February 2016 to 2.02 million tonnes on the back of weaker than expected export growth, as more of Malaysia's export share was lost to Indonesia which catered to price-sensitive customers such as India and China. However, this did not give rise to extreme selling pressure. The current price levels are expected to continue, if not move upward should CPO production fail to meet recovery expectations. In addition, good global import demand and comfortable stock levels are also expected to lend continuing support to prices.

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