Boustead Plantations stages turnaround in 3Q with RM17.9m net profit

KUALA LUMPUR: Boustead Plantations posted a net profit of RM17.97mil in the third quarter ended Sept 30,2020, a turnaround from a net loss of RM34.31mil a year ago, underpinned by the rebound in crude palm oil prices.

Announcing a strong set of financial results on Monday, it said revenue rose by 47.7% to RM205.68mil from RM139.24mil.

“The strong results were primarily driven by higher palm product selling prices, which resulted in a profit from operations of RM40mil, ” it said.

Earnings per share were 0.8 sen compared with loss per share of 1.53 sen. It declared an interim dividend of 0.5 sen. The dividend will be paid on Dec 30 to shareholders in the register as at Dec 9.

CPO prices rose by RM7% to RM2,772 per tonne from RM2,062 a year ago. Palm kernel price per tonne climbed by 30% to RM1,481 from RM1,138. Fresh fruit bunched production increased by 14% to 273,625 tonne.

For the nine months, its net profit declined by 46% to RM15.49mil from RM28.71mil due to the weaker quarters earlier this year. However, revenue increased by 34.5% to RM535.42mil from RM398.10mil.

For the remainder of the year, Boustead Plantation said CPO prices, crop production and the group’s ongoing transformation programme will remain key performance drivers.

“CPO prices are expected to remain supportive on the back of robust demand for palm oil from China, India, Europe and Pakistan. Strong global demand and lower than expected production have also resulted in extremely tight Malaysian palm oil inventories, ” it said.

Boustead Plantations also said weather conditions are also set to be a major determining factor for CPO and other vegetable oil prices for the remainder of the year, particularly due to the current La Nina weather patterns.

This has seen a recent downward revision of crop estimates for soybean, sunflower seed and other oilseeds triggering heavy buying and elevating CPO price to the RM3,000 range.

However, the recent surge of Covid-19 cases could potentially impact global demand, particularly from the hotels, restaurants and catering (HORECA) sector.

“Nevertheless, despite some disruption in productivity improvement initiatives due to restrictions during the pandemic, Boustead Plantation’s transformation programme is progressing well and the group is focused on remaining on track to achieve its objectives in order to ensure sustainable long-term growth, ” it said.

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