MHC Plantations third quarter earnings hit by lower sales volume

PETALING JAYA: MHC Plantations Bhd’s net profit for the third quarter ended Sept 30, 2017 fell 12.36% to RM5.08 million from RM5.80 million a year ago due to lower sales volume and production.

In a filing with Bursa Malaysia yesterday, the group said its sales volume of crude palm oil (CPO) and palm kernel (PK) fell by 7% and 2% respectively while fresh fruit bunches (FFB) production fell by 13%.

It also incurred higher power plant maintenance cost during the quarter due to a scheduled maintenance that took place in August and September, to ensure machineries are in safe and good condition.

Revenue for the quarter fell 4.84% to RM96.68 million from RM101.60 million a year ago.

For the nine months ended Sept 30, 2017, net profit jumped 89.62% to RM14.24 million from RM7.51 million a year ago while revenue rose 21.17% to RM283.42 million from RM233.90 million a year ago.

The group attributed the improved performance to increases in CPO, PK and FFB prices by 12%, 2% and 13% respectively and increases in sales volume of CPO, PK and FFB by 7%, 16% and 29% respectively.

During the period under review, the group also saw FFB production increase by 6%, an improvement in milling margin and increase in export of electricity by 22% as well as higher selling price of empty fruit bunches oil by 47%.

MHC expects satisfactory results from the plantation and oil mill divisions for the rest of 2017. It also expects better performance from the power plant division in view of the completion of the scheduled maintenance in the current quarter.

Its share price closed unchanged at 88 sen with a total of 12,000 shares traded yesterday, giving it a market capitalisation of RM172.96 million.