Latest Quarterly Results

Quarterly Report For The Financial Period Ended 31 March 2019

Financials Archive

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Unaudited Condensed Statement Of Consolidated Comprehensive Income

Unaudited Condensed Consolidated Statement Of Financial Position

Performance Review

For the first quarter of 2019, the Group recorded an unaudited pre-tax loss of RM14.0 million as compared with profit of RM7.8 million for the corresponding quarter last year.

Revenue fell by RM19.7 million from RM154.6 million to RM134.9 million due to significantly lower prices of palm products whilst operating expenditure fell by RM10 million to RM135.8 million. This led to the loss from operations of RM863,000. The quarter's result was further impacted by the increase in interest expenses.

CPO realised an average selling price of RM2,017 per MT, down by RM474 per MT or 19% from RM2,491 per MT for the same period last year. PK's average price of RM1,300 per MT was down by RM888 per MT or 41%.

FFB production for the quarter of 258,996 MT was 14% higher than the first quarter of 2018's production of 226,323 MT. OER increased from 20.5% to 21.4% while KER remained stable at 4.5%.

Peninsular Malaysia Region

Peninsular Malaysia region achieved a segment profit of RM9.9 million, a shortfall of RM0.8 million from profit of RM10.7 million for the corresponding quarter last year. The region's FFB crop of 105,646 MT was up by 14% from 2018.

Sabah region

Sabah region recorded a segment loss of RM4.4 million, a decline of RM7.8 million, from profit of RM3.4 million for the first quarter of 2018. The lower selling prices and increased depreciation charges were the main reasons for the decline in performance. FFB production for the region rose by 22% to 127,495 MT.

Sarawak region

Sarawak region's segment loss of RM6.3 million increased from RM5.2 million for the same period last year. The region's performance was impacted by lower palm product prices and FFB production of 25,855 MT which was down from corresponding quarter last year by 10%.

Prospects for the Coming Year

FFB crop production and selling prices are the two key drivers to the Group's profitability.

Although the gain on disposal of land in Seberang Perai Utara, Pulau Pinang will boost the Group's profit for financial year 2019, the Group foresees operating performance to remain challenging.

Demand for palm oil is anticipated to grow in tandem with insufficient supplies of other edible oils, increased imports by China and higher biodiesel blending mandates in Indonesia. However, recovery in prices will be capped by the high inventories for palm oil. In the near term, upcoming festivities, the attractive prevailing low prices of CPO and increased exports to India due to reduction in import duties will support prices.

The Group expects to record some growth in crop production from a larger area of operations and operational efficiencies which are taking place but the challenges surrounding the operations in Sarawak will to some extent, dampen performance.

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