Boustead Plantations net profit up 2.5% at RM43.68mil

Deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said the improved results is testament that the company

PETALING JAYA: Boustead Plantations Bhd posted a 2.5% increase in net profit to RM43.68mil in the first quarter ended March 31, 2017 compared with the same quarter a year earlier.

This was achieved on higher crude palm oil (CPO) prices and oil palm production.

During the quarter in review, the plantation company’s revenue increased 38% to RM189.02mil. Earnings per share rose to 2.73 sen from 2.66 sen.

The company has declared a dividend of 2.5 sen a share for the quarter in review. Boustead Plantations’ shares closed unchanged yesterday at RM1.64.

In a statement, the company said earnings growth during the quarter in review were driven mainly by buoyant palm product prices and better crop production.

It pointed out that the average CPO selling price for the quarter under review was RM3,166 per tonne, up 40% from the previous corresponding quarter, while the average palm kernel price rose by 68% to RM3,204 per tonne.

Fresh fruit bunches (FFB) production, on the other hand, increased 13% to 209,526 tonne, largely due to improved yields as crops recovered from the effects of El Nino.

During the quarter in review, the average oil extraction rate was 20.7%, a slight reduction from last year’s corresponding period, while kernel extraction rate was marginally lower at 4.3%.

Vice-chairman Tan Sri Lodin Wok Kamaruddin said the oil palm FFB output uptrend was expected to continue on recovery from the El Nino weather phenomenon.

“However, CPO prices will likely be mitigated by the bumper crop of soybean in the US and South America, coupled with growing pressures on biodiesel supplies to the US and Europe, as well as low crude oil prices.

“The market is predicted to remain challenging in the second half of the year, with the possibility of higher CPO production, which could result in a build-up of inventories,” Lodin said.