United Malacca sees higher FFB production in FY23

PETALING JAYA: United Malacca Bhd expects fresh fruit bunch (FFB) production to increase in the financial year 2023 (FY23), on the back of higher yield performance, but the group cautioned against rising operating costs due to higher logistics, material and labour costs.

For the third quarter ended Jan 31, 2023 (3Q23), the plantation group’s revenue increased by 9.4% year-on-year (y-o-y) to RM161.6mil.

Earnings, however, fell by 58% y-o-y to RM12.7mil or earnings per share of six sen due to lower average crude palm oil (CPO) and palm kernel (PK) prices, as well as higher cost of production, particularly with regards to raw material and labour.

In a filing with Bursa Malaysia, the group said the plantation profit for its Malaysian operations fell by 40% y-o-y in 3Q23 to RM22.4mil, while its Indonesian operations recorded a plantation loss of RM1.7mil compared with a profit of RM3.7mil in 3Q22.

In 3Q23, the earnings before interest, taxes, depreciation and amortisation (Ebitda) for United Malacca’s local operations was 27% lower y-o-y at RM36.1mil.

The group’s Indonesian business registered an Ebitda of RM4.1mil in the same period, which is a 59% decline y-o-y.

United Malacca said the reduced Ebitda for its Malaysian operation was mainly due to lower average CPO price, which fell by 16.3% y-o-y to RM4,061 per tonne in 3Q23. The price of PK dropped to RM2,031 per tonne in 3Q23 from RM4,036 in the preceding year.

Local fresh fruit bunch (FFB) production was higher by 29% or 22,664 tonnes in 3Q23. In Indonesia, the group’s FFB production was higher by 79% or 8,618 tonnes.

The drop in Ebitda was mainly due to lower average CPO price of RM3,240 per tonne in 3Q23 from RM4,116 per tonne in 3Q22. PK price was lower by 51% to RM1,548 per tonne.

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