Oil palm group cuts dividends on lower profit

KUCHING: Sarawak Plantation Bhd will pay out RM12.6mil in dividends for the financial year ended Dec 31, 2015 on March 30.

The payout is based on 4.5 sen per share, which is half of the 9 sen per share paid in 2014.

The cut in dividends came admist the sharp drop in Sarawak Plantation’s group net profit to RM20.5mil from RM60.9mil in 2014 due to the weak oil palm market. Group revenue slipped to RM334.2mil from RM389.9mil previously.

Sarawak Plantation, which has oil palm estates in the northern and central region, said the drop in earnings was due mainly to lower realised average selling prices and volumes of crude palm oil (CPO) and palm kernel.

The profits for 2015 were contributed largely by a RM5.8mil gain in the disposal of land and a reversal of prior year’s impairment loss on RM28.5mil in deposits paid for the acquisition of equity interest in four plantation companies.

The impairment loss was then recognised as other non-operating income category, the company said when releasing its yearly financial results.

For the October-December quarter, Sarawak Plantation posted a group net profit of RM2.7mil, down sharply from RM23.2mil as turnover fell to RM91.3mil from RM97.2mil a year earlier.

“The sales volumes of CPO and palm kernel decreased by approximately 7.9% and 10.9% respectively. The realised average selling price of CPO had decreased by approximately 1.3% whereas the average selling price of palm kernel increased by 19.7% for the current quarter,” said the company.

Sarawak Plantation expects a challenging 2016 in the light of anticipated slowing down of the global economy and low commodity prices.

The group said although the group’s performance was largely dependent on the production, operational efficiency and pricesl, it would continue to carry out mitigating measures, such as improvement in productivity and control of costs.

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