Analysts rate United Plantations highly

  • Business
  • Saturday, 04 Jan 2003


WHEN the crude palm oil (CPO) market is firm,it is not just the prices of plantation stocks that reflect the good news. 

Plantation companies tend be in a giving mood in a time like this. They oftenshare the bumper profits with shareholders via higher dividends. 

United Plantations Bhd is one such example.Last month,the company declared an interimdividend of 12.5 per cent for 2002,of which 7.5 per cent is tax exempt.Minus tax of 28 per cent, this works out to a net interim dividend of 11.1 per cent. 

United Plantations has been paying grossinterim dividends of 10 per cent between 1997and 2001.In fact,in the period since 1988,the2002 interim dividend is the company ’s highest.Naturally,this has raised hopes that the finaldividend will be higher than the 10 per cent ofthe past two years.The company is noted for its generous divi-dend policy.Its annual dividends have notdipped below 20 per cent since 1993.The peak was in 1998,of course,when theweak ringgit and weather conditions combinedto propel CPO prices to a giddy average ofRM2,400 per tonne.That year,the dividend pay-out was 35 per cent.But it is worth remembering that CPO priceshave not always been buoyant in this period.For example,the commodity hit bottom at justunder RM700 per tonne in early 2001 and the aver-age was about RM960.Yet,United Plantations paiddividends of 20 per cent that year.Last year was certainly a good year for theCPO market.Local prices averaged at overRM1,300 per tonne and the upward trend isexpected to continue throughout this year.Someobservers think that the price will go up toRM1,800 in the near term.This reinforces the belief that UnitedPlantations will declare a final dividend for 2002that will at least equal the interim distribution.In addition,plantation analysts rate UnitedPlantations highly,particularly in the currentenvironment,because it is a pure oil palm play-er and is well-managed.It is telling that the company was admitted asa component stock of the Kuala LumpurComposite Index on Nov 18.Online investment adviser Surf88 is amongthose who recommend the counter to investorsseeking exposure to the plantation sector.“Assuming 11.1 per cent in the net final divi-dend this year,the full-year net yield of 5.2 percent (based on a share price of RM4.26)wouldbe one of the highest among plantation stocks,”it explains.“This,together with strong plantation earn-ings and good management track record,firmlyunderpins our Buy recommendation for UnitedPlantations.”Almost 85 per cent of its plantation land isplanted with oil palm.Such exposure allows it tobenefit in a big way when CPO prices climb.Its pre-tax profit of RM24.5 million for thequarter ended Sept 30 last year was almost dou-ble that of the same quarter in 2001 and a 67 percent improvement over the preceding quarter ’spre-tax profit.It helps that the company ’s CPO productionthis year should be higher than that of last year(98,763 tonnes).Until November,the companyhad produced 97,609 tonnes.The company isexpected to report at least another 9,000 tonnesfor December.Senior executive director Tan Sri Borge Bek-Nielsen heads the company.He has been withUnited Plantations since 1951 and is easily oneof the most experienced planters around.On April 22,the company announced pro-posed acquisitions that will expand it maturehectarage by more than 40 per cent.The counterclosed on Thursday at RM4.26.“ It is telling that thecompany was admit-ted as a componentstock of the KualaLumpur CompositeIndex on Nov 18.”Analysts rateUnited PlantationshighlyDividend updates (Dec 30 to Dec 31)Company Declared Amount Type Ex-date Record Payable Total Total for(%) date for year Previous(%) years (%)Dividends with ex-date Dec 30 to Jan 10Company Declared Amount Type Ex-date Record Payable Total Total for(%) date for year Previous(%) years (%)AISB Dec 4 1 First & Final Jan 15 Jan 17 Jan 30 1 1Apollo Dec 26 20 Interim Jan 13 Jan 15 Jan 24 20 8Bina Goodyear Nov 25 5 TE First & Final Jan 13 Jan 15 Jan 23 5 5Crescendo Dec 20 2.5 Interim Jan 9 Jan 13 Jan 28 2.5 5Delloyd Dec 17 5 TE Interim Jan 8 Jan 10 Jan 28 5 10Edaran Nov 22 7.5 TE First & Final Jan 6 Jan 8 Jan 21 7.5 10FFM Bhd Dec 24 10 2 nd Interim Jan 16 Jan 20 Feb 11 17 17Gamuda Dec 10 5 Final Jan 15 Jan 17 Jan 24 10 8Hunza Prop Nov 19 7.5 First & Final Jan 8 Jan 10 Jan 20 7.5 7.5KESM Ind Dec 17 1.75 First & Final Jan 10 Jan 14 Feb 5 1.75 4.5KM Loong Dec 20 2 Interim Jan 9 Jan 13 Jan 28 2 5Maruichi Dec 4 5 TE Interim Jan 6 Jan 8 Feb 6 5 20Matsushita Dec 19 10 Interim Jan 14 Jan 16 Jan 27 10 50Multico Dec 30 10 TE Final Jan 13 Jan 15 Jan 28 10 10Natwide Dec 17 5 Interim Jan 6 Jan 8 Jan 16 5 15.3NWP Dec 27 10 TE Interim Jan 16 Jan 20 Jan 28 10 10Pantai Nov 29 1 + 0.5 TE Final Jan 6 Jan 8 Jan 22 1.5 2Road Builder Nov 26 2 Final Jan 6 Jan 8 Jan 17 5 5Safeguards Dec 3 4 Final Jan 16 Jan 20 Feb 15 10 6Texchem Dec 18 4 2 nd Interim Jan 8 Jan 10 Jan 29 7 7Utd Malacca Dec 12 3 TE Interim Jan 9 Jan 13 Feb 10 3 12Utd Plantations Dec 2 7.5 TE + 5 Interim Jan 6 Jan 8 Feb 6 12.5 20VS Industry Dec 9 3 TE Final Jan 6 Jan 8 Jan 21 6 18F & N Dec 30 7 TE Final Jan 23 Jan 27 Feb 24 12 9Kulim Dec 31 10 Interim Jan 29 Jan 31 Feb 18 10 10Metro Kajang Dec 30 3.9 TE First & Final Jan 28 Jan 30 Feb 21 3.9 3.5Multico Dec 30 10 TE Final Jan 13 Jan 15 Jan 28 10 10SAB Dec 31 2.5 TE Interim Jan 27 Jan 29 Feb 21 2.5 5C Co om mp pi il le ed d b by y B Bi iz zW We ee ek kBek-Nielsen is easily one of the most experiencedplanters around

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