Boustead Plantations Q3 profit jumps to RM37.36mil
PETALING JAYA: Boustead Plantations Bhd’s net profit jumped 58% to RM37.36mil in the third quarter ended Sept 30 compared with RM23.63mil in the same quarter last year.
The plantation company attributed its positive results to better palm product prices and lower operating expenditure for shortfalls in fresh fruit bunch production.
Its revenue in the quarter rose to RM199.32mil against RM166.55mil in the previous corresponding quarter. Its earnings per share for the period rose to 2.34 sen compared with 1.48 sen previously.
Boustead Plantations has declared a dividend of five sen per share in respect of the year ending Dec 31, 2016. The dividend will be paid on Dec 14.
In the first nine months, Boustead Plantations posted an increase in net profit to RM177.49mil from RM79.6mil last year.
This was achieved on a higher revenue of RM511.22mil against RM451.8mil last year.
“Our improved results for the quarter were primarily due to stronger palm product prices and lower operating expenditure, which contributed positively to our earnings. Crude palm oil (CPO) prices were buoyed by lower crop production and a higher-than-expected surge in market demand, which saw the CPO price reaching a new high in September 2016.
“As the year draws to a close, external factors such as the release of rapeseed oil reserves in China and the volatile global economy continue to be mitigating factors. However, given the impact of the El Nino phenomenon on crop production, CPO and palm kernel (PK) prices are expected to remain favourable,” said vice-chairman Tan Sri Lodin Wok Kamaruddin in a statement.
The group added that its net profit was supported by a gain on disposal of plantation land of RM117.8mil, better palm product prices and lower operating expenditure.
Boustead Plantations said for the nine-month period, CPO achieved an average selling price of RM2,475 per tonne. This was an increase of RM315 per tonne, or 15% from RM2,160 per tonne in the corresponding period last year.
On prospects, Boustead Plantations said it would be much driven by CPO prices and crop production. CPO and PK prices are expected to remain favourable, while the blockades in the Sarawak estates and the lingering moisture stress effects of El Nino will affect crop production.
“The CPO price reached a new high in September 2016 on the back of a higher-than-expected surge in market demand, coupled with the continuing dampened crop production after El Nino.
“The prevailing weak global economy and adverse effects of El Nino on production is expected to remain, while demand could be affected by further release of rapeseed oil reserves in China and a weaker yuan currency against the greenback,” Boustead Plantations said in its filing with Bursa Malaysia yesterday.
Nonetheless, it said CPO prices are expected to remain encouraging, thus allaying concerns and contributing towards a positive outlook.