KUALA LUMPUR: Boustead Plantations Bhd
's earnings surged to RM562.42mil in the third quarter ended Sept 30, 2017, boosted by gains from the land sale.
It had on Tuesday also declared a third interim dividend of three sen per share and a special dividend of seven sen per share for FY ending Dec 31, 2017. The dividends will be paid on Dec 19.
It said the Q3 earnings surged from RM37.93mil a year ago while profit before tax (PBT) increased jumped to RM599mil from RM50.19mil.
“These improved results were primarily attributable to gains realised on disposal of land amounting to RM555mil,” it said. However, revenue for Q3 fell 8% to RM183.43mil from RM199.32mil.
In addition, to improve liquidity of the stock and reward shareholders, it had proposed a two-for-five bonus issue of 640 million new bonus shares.
For the nine-months, its earnings jumped 254% to RM177.49mil from RM451.29mil in the previous corresponding period. Its revenue increased by 6% to RM541.93mil from RM511.22mil.
“Excluding the gain on disposal of plantation assest of RM554.90mil (2016: 124.2mil), the profit was an improvement of 68% from 201. The profit was largely contributed by better crude palm oil prices,” it said.
Boustead Plantations said as a result of improved production from the northern estates and young palms on the east coast, fresh fruit bunches (FFB) crop rose by 10% to 305,713 tonnes.
The Sabah region posted a higher operating profit of RM59mil, up 24% from RM47mil a year ago. FFB crop grew by 4% to 294,243 tonnes despite high turnover of workers and erratic weather conditions.
The Sarawak region registered RM5mil operating profit of RM5mil versus RM1mil a year ago dueto higher selling prices for palm products. FFB crop for the period saw a slight drop to 96,712 tonnes.
Boustead Plantations vice chairman Tan Sri Lodin Wok Kamaruddin said the nine-month financial results were due to gains realised from disposal of land while earnings were supported by better selling prices for palm products.
“Going into the last quarter of the year, while our Peninsular and Sabah regions have seen improved FFB yields, this may be hampered by erratic weather conditions and labour shortages, along with difficult ground conditions in Sarawak.
“In addition, Malaysia’s export growth was weaker than expected due to stiff competition from Indonesia which caters to price-sensitive markets such as China and India,” he said.
Lodin said despite these challenges, crude palm oil (CPO) prices have outperformed expectations as production recovery was not as strong as expected post El-Nino.
He anticipated that favourable CPO prices will remain supportive with upward potential should CPO production fall short of expectations.
“Robust global demand and comfortable stock levels are also expected to support CPO prices.
“Furthermore, the group’s proposed acquisition of 11,600 hectares of plantation land in Sabah is on track. Once completed, this is expected to unlock substantial value for the group over the long run,” said Lodin.
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