ISLAND and Peninsular Bhd (I&P) is moving towards achieving a pre-tax profit of RM200mil for the year ending Jan 31, 2004. Of this profit, 65% is expected to come from its plantation division and the balance from property and trading, chairman Datuk Mohd Zuki Kamaluddin said.
We achieved RM111mil in pre-tax profit in the last financial year and with the strengthening of our plantation and property divisions, we are very optimistic, he told a media briefing after the companys AGM yesterday.
I&P posted a pre-tax profit to RM36.1mil for its 1st quarter ended April 30 on revenue of RM106.6mil, up 70% and 12% respectively over the previous corresponding quarter. The plantation division contributed 62% of the revenue, property development 33% and trading 5%.
Managing director Dr Radzuan Abdul Rahman said moving forward, more of the company's oil palm plantations would be maturing. Yield per hectare is also expected to increase to 20 tonnes per ha from 13 in the next 2 years, he said.
He said I&P would be building on the strength of its mills. I&Ps oil extraction rates (OER) is now one of the highest in the industry.
In the last financial year, it achieved an average OER of 21.77%, which is better than the national average of 19.9%, he said.
The company has a fully developed oil palm landbank covering 61,448 ha, of which 38,312 ha are planted with mature palms, 16,955 with immature trees and 2,080 ha are in the course of planting.
On expansion plans, Dr Radzuan said with the merger between I&P and its plantation subsidiary Austral Enterprises Bhd completed in April, shareholders funds now exceeded RM1bil, giving the group access to a larger pool of funds to finance future growth.
Our palm oil refinery in Sarawak will come onstream in May 2004, followed by a fertiliser plant to supplement the companys palm oil products business, Dr Radzuan said, adding that the refinery in the Kidurong Industrial area of Bintulu would cost RM47mil but was projected to contribute RM100mil to turnover yearly.
He said I&P was looking at diversifying into more downstream value-added product lines beyond refinery with the possibility of partnerships in future.
Dr Radzuan said I&P also intended to progressively expand its plantation landbank to 80,000 ha, adding that with consistent performance and improving yields from its plantation division, the company also expected to achieve RM1bil in turnover a few months earlier than the end of 2005.
I&P plans to launch some 836 units from its projects including maiden launches at 2 new projects, the 565-acre Kota Bayuemas in Klang and the 96-acre Bayan Heights in Penang this financial year.
The company currently has 4,968 acres of land for property development, of which 2,926 acres have yet to be developed.
It is in the process of purchasing another 60 acres from 3 new parcels in the Petaling district, adjoining its Bandar Kinrara project.
On talks that I&P, whose substantial shareholder is Permodalan Nasional Bhd, would be one of the anchor groups in the consolidation of government-owned property companies and involved in the merger of plantation companies, Dr Radzuan said the company had yet to obtain any additional information or instructions on the matter from PNB.