Boustead Plantations reports RM21.89mil Q3 net loss

Group attributes fall to decline in palm product prices and lower output

PETALING JAYA: Boustead Plantations Bhd has recorded a net loss of RM21.89mil for its third quarter ended Sept 30, compared to a net profit of RM557.6mil during the same period a year ago.

The group attributed the fall to the decline in palm product prices, lower crop production and the increase in expenditure corresponding to a larger area under harvesting.

It added that the disparity in performance was also due to the gain on disposal of plantation assets of RM554.9mil recognised during the third quarter of the previous financial year.

The group’s revenue for the period fell 29% to RM131.09mil.

For the first nine months of financial year 2018 (FY18), the group saw a net loss of RM38.8mil, compared to a net profit of RM597.9mil during the previous corresponding period.

Revenue for the period was down 21% to RM427.4mil.

Apart from the decline in crop production and selling prices, the start-up expenses for Pertama Estates had also impacted its performance, the group said in its filing with the stock exchange.

The peninsular region achieved a segment profit of RM18.7mil, compared with RM63.3mil a year ago, representing a 70% decline, which was mainly attributed to the downturn in prices and production.

The region’s fresh fruit bunch crop of 264,020 tonnes was down from 2017 by 14%.

In Sabah, the group incurred a segment loss of RM23.3mil, down by RM71.4mil, while in Sarawak, there was a segment loss of RM17.6mil.

Compared to the immediate preceding quarter, however, the group saw an improvement of RM3.1mil in unaudited loss before tax at RM23.2mil, mainly because better crop production cushioned to some extent the falling selling price.

The group’s revenue, however, was 8% lower than the preceding quarter’s revenue of RM141.8mil.

“The industry continues to be impacted by declining palm product prices and weaker demand, as the purchasing power of India fell along with the depreciation of its currency against the US currency. The trade war between the United States and China also led to lower soybean oil prices, which further depressed crude palm oil (CPO) prices,” a spokesperson for the group said in a statement.

Moving forward, he noted that soft CPO prices are expected to persist for the remainder of the year, given the high palm oil inventories and slow export growth.

The forecast of a bumper soybean production in the 2018/19 growing season in Brazil is also expected to put further pressure on CPO prices.

“However, over the long term, the group is optimistic that we would be able to deliver sustained earnings as crop production improves, particularly with contributions from the recently acquired Pertama estates,” said the spokesperson.

The group has declared a third interim dividend of two sen per share for FY18, to be paid on Jan 4, 2019.