IJM Plantation’s Q1 net profit falls 12% to RM22.9m

PETALING JAYA: IJM Plantations Bhd saw its net profit for the first quarter ended June 30, 2015 fall 12.4% to RM22.87 million on lower revenue and lower net unrealised exchange losses.
Revenue was down 20% to RM141.74 million, against RM177.8 million a year ago, mainly due to lower commodity prices and sales volume.
In a filing with Bursa Malaysia yesterday, the group said its fresh fruit bunch (FFB) production was lower in the first quarter due to the change in cropping pattern.
However, it said the overall financial performance is improved, as a result of higher crop production from a larger mature planted area and lower net unrealised exchange losses from US Dollar borrowings during the quarter.
Commenting on its prospects, IJM Plantation said it expects the performance for its current financial year to be challenging, despite the effect from the El Nino weather pattern and the mandatory biodiesel blending in Indonesia and Malaysia, which potentially rendering some level of price support.
"Notwithstanding the higher crop production from the increasing young mature areas in Indonesia and FFB yields being sustained in the Malaysian operations, the business environment is expected to be impacted by the volatility of the foreign exchange rates, a weak global demand scenario, high inventory levels and the recent introduction of the Indonesian palm oil levy," it added.
Its share price closed higher 1.27% or 4 sen at RM3.20, with some 204,800 shares changing hands.