Lower CPO price, poor yields drag United Malacca into Q2 loss
PETALING JAYA: Lower crude palm oil (CPO) prices and poor yields caused United Malacca Bhd to slip into a net loss of RM12.1mil in the second quarter ended Oct 31, compared with a net profit of RM11.8mil in the corresponding quarter last year.
During the quarter in review, the plantation company’s revenue fell 33.7% to RM53.8mil from RM81.2mil in the previous corresponding quarter. It posted a loss per share (LPS) of 5.76 sen, compared with an earnings per share (EPS) of 5.64 sen previously.
Despite the losses, United Malacca proposed a first interim dividend of two sen per share.
The company’s shares fell two sen to close at RM5.41 yesterday.
In its filings with Bursa Malaysia, United Malacca explained that it posted a loss in the current quarter due mainly to lower average prices of CPO and palm kernel (PK), which fell 20% and 33% respectively; low fresh fruit bunches (FFB) yield from both its Malaysian and Indonesian operations; as well as the impact of young matured palms (Malaysia - 2,184 hectares and Indonesia - 3,384 hectares) with high unit cost of production.
In addition, the group also registered a net foreign exchange loss of RM6.25mil during the quarter in review.
For the cumulative period, United Malacca’s group net loss stood at RM30.6mil, compared with a net profit of RM11.5mil in the six months to October 2017.
Hence, its LPS stood at 14.58 sen, compared with an EPS of 5.49 sen in the previous corresponding period.
United Malacca’s six-month revenue this year fell 38% to RM93.8mil from RM151.5mil in the previous corresponding period.
“The group has recorded a loss in the first half year of financial year (FY) ending April 30, 2019, mainly due to low FFB yield caused by adverse wet weather, low CPO and PK prices as well as net foreign exchange loss of RM11.4mil. However, the group expects FFB production to
pick up in the second half of FY2019,”
United Malacca said.
Meanwhile, the group said if CPO prices remained at current weak levels, its performance for the remaining six months to April 2019 would remain challenging.