KUALA LUMPUR: Chin Teck Plantations Bhd, which saw its net profit fall 8% to RM25.3mil in the first quarter ended Nov 30, has issued a profit warning.
“The financial performance for the financial year ending Aug 31, 2023 (FY23) is expected to decline compared with the record profit of the previous FY22 and in line with the drop in crude palm oil (CPO) and palm kernel (PK) prices from the historically high levels,” Chin Tek said in a filing with Bursa Malaysia.
In the quarter to Nov 30, the plantation group’s revenue rose 8.2% to RM62.9mil from RM58.2mil a year ago due to significant increases in the sales volume of fresh fruit bunches (FFB), CPO, and PK even though the average selling prices decreased.
Chin Teck Plantations noted that its cost of sales increased substantially due to an increase in the plantation operating expenses, especially the rising cost of fertiliser.
It said the unrest in the surrounding villages located in the vicinity of the plantations in Lampung Province, Indonesia has caused the disruption in the routine harvesting of FFB. The oil palm plantations have since commenced harvesting activities and mill operations. The total area accessed is approximately 53.61% of the total planted area.
However, as reported previously, harvesting of the mature fields in the oil palm plantation of the joint venture located in South Sumatera Province, Indonesia has been delayed due to the unrest in the villages neighbouring the estate.
Chin Teck Plantations said the commencement of harvesting is pending clearance by the relevant authorities.