Lower prices of products hit Sarawak Oil Palms earnings

KUCHING: Sarawak Oil Palms Bhd’s (SOP) quarterly earnings have taken a plunge due to lower palm oil products prices and drop in production volume of fresh fruit bunches (FFB) from its plantations.

In the three months eneded March 31, 2015, group pre-tax profit fell to RM8mil from RM49mil a year ago despite improved revenue of RM630.9mil from RM546.7mil. Earnmings per share slipped to 1.24 sen from 7.68sen previously.

The Miri-based plantation company attributed the RM84.3mil or 15.4% jump in revenue to higher trading volume of palm oil products.

It said the average palm products realised prices in the latest quarter was RM2,252 per tonne (RM2,171 per tonne in the October-December 2014 quarter) while that of palm kernel products was RM2,118 per tonne (RM1,714 per tonne).

The lower FFB production volume, it pointed out, was because of changes in weather pattern.

“The performance of the group would continue to be driven by the palm products price movement which is dependent on the world edible oil market, movement of the ringgit and economic situation,” SOP said when commenting on prospects in its latest financials.

SOP group had 63,530ha of oil palm estates as at Dec 31, 2013 and it owns six palm oil mills and a refinery and palm kernel crushing plant in Bintulu.

SOP said its proposed acquisition of 60% equity interest in both DD Pelita Sebungan Plantation Sdn Bhd and Mutiara Petlita Genaan Plantation Sdn Bhd and 34.9ha of land in Bintulu for the construction of a proposed palm oil mill was aborted as the vendors were unable to obtain consent from the Sarawak Land Development Ministry for the sale and transfer of their sale shares.

Meanwhile, SIG Gases Bhd posted lower group net porofit of RM872,000 in first quarter ended March 31,2015,down from RM1.7mil in the preceding year corresponding period although revenue improved to RM16.3mil from RM15.8mil.

The group,which has industrial gases’ manufacturing and refilling facilities in Bintulu,said the country’s overall industrial environment could be challenging this year due to the implementation of the 6% goods & services tax (GST),anticipated cutting back in capital expenditure in the oil and gas sector,the government’s austerity measures and anticipated inflationary consumer prices.

“The management shall continue to implement cost-saving measures and to improve productivity.The management is also exploring asset lightening measures to improve efficiency of its capital to enhance return to shareholders,” said SIG .

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