Latest Quarterly Results

Quarterly Report For The Financial Period Ended 30 September 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 third quarter of 2018, the Group recorded a pre-tax loss of RM23.2 million as compared with a profit of RM597.0 million for the same period last year. The loss was attributed to the decline in palm product prices, lower crop production and increase in expenditure corresponding to a larger area under harvesting. The disparity in performance was also due to the gain on disposal of plantation assets of RM554.9 million recognised in the third quarter of 2017.

For the nine-months ended 30 September 2018, pre-tax loss of RM41.6 million was a reduction of RM698.0 million from the same period in 2017. Besides the decline in crop production and selling prices, the start-up expenses for Pertama Estates had also impacted performance. Amortisation charge for bearer plants and revalued leasehold land arising from the adoption of MFRS amounted to RM59.453 million (2017: RM55.726 million).

FFB production for the nine-month period declined by 5% to 660,088 MT. OER was well supported at 21.1% as compared with 20.9% for the corresponding period last year. The average KER of 4.4% was also marginally higher than the rate for the corresponding period of 2017. CPO achieved an average selling price of RM2,391 per MT, down by RM480 per MT or 17% from RM2,871 per MT for the same period last year whilst PK's average price of RM1,924 per MT, was down by RM554 per MT or 22%.

Peninsular Malaysia Region

Peninsular Malaysia region achieved a segment profit of RM18.7 million as compared with RM63.3 million for the same nine-month period in 2017. The decline in profit of RM44.6 million or 70% was mainly attributed to the downturn in prices and production. The region's FFB crop of 264,020 MT was down from 2017 by 14%.

Sabah region

Sabah region incurred a segment loss of RM23.3 million, down by RM71.4 million from profit of RM48.1 million for the corresponding nine months' period of 2017. Although FFB production of 304,253 MT was an increase of 3% because of the contribution of Pertama estates, the lower selling prices and increase in operating expenditure led to the decline in performance.

Sarawak region

Sarawak region incurred a segment loss of RM17.6 million as compared with profit of RM0.5 million for the nine-month period of 2017. The region's performance was impacted by lower palm product prices and FFB production of 91,815 MT which was down 5% from the corresponding period last year.

Prospects for Rest of the Year

Crop production and selling prices are two key factors that influence the Group's profitability.

The Group's crop production is much affected by labour shortages and operating issues in the Sarawak region but supported by the contribution from the recently acquired Pertama estates.

CPO prices slid downwards during the third quarter in the midst of increased supplies and stockpiles. The trade war between China and United States had caused soy oil prices to fall and this also led to lower palm oil prices. However, demand remained lacklustre as the purchasing power of India was hit by its weak currency against US currency. The forecast of bumper soyabean production in Brazil for 2018/19 growing season is also putting a damper on CPO prices.

The price outlook for the remaining months of the year is expected to remain challenging due to high palm oil inventories and slow export growth.

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