Land disposal gain lifts Boustead Plantations

PETALING JAYA: Boustead Plantations Bhd’s net profit for the third quarter ended Sept 30, 2017 leaped 15 times to RM562.42 million from RM37.36 million in the same quarter a year ago, mainly attributable to a land disposal gain of RM555 million.
Its revenue, however, declined 8% to RM183.43 million from RM199.33 million.
The group proposes to declare an interim dividend of 3 sen and a special dividend of 7 sen per share.
For the first nine months of the year, Boustead Plantations’ net profit jumped more than threefold to RM628.8 million from RM177.5 million on the back of a 6% increase in revenue to RM541.93 million from RM511.23 million.
The average crude palm oil (CPO) selling prices for the nine-month period was RM2,871 per metric ton (MT), up 16% from RM2,475 per MT in the same period last year, while average palm kernel price rose 8% to RM2,478 per MT.
Fresh fruit bunch (FFB) production increased 5% to 696,668 MT, mainly as a result of improved yields post El-Nino in the first half of the year. Average oil extraction rate for the period was 20.9% and kernel extraction rate was 4.3%, slightly lower than the same period last year.
Looking ahead, Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin said while Peninsular Malaysia and Sabah have seen improved FFB yields, this may be hampered by erratic weather conditions and labour shortages, along with difficult ground conditions in Sarawak.
“In addition, Malaysia’s export growth was weaker than expected due to stiff competition from Indonesia which caters to price-sensitive markets such as China and India.”
Despite these challenges, he said, CPO prices have outperformed expectations as production recovery was not as strong as expected post El-Nino.
“It is anticipated that favourable CPO prices will remain supportive with upward potential should CPO production fall short of expectations. Robust global demand and comfortable stock levels are also expected to support CPO prices.”
On a separate note, Boustead Plantations proposes to undertake a bonus issue exercise to improve the liquidity of the stock and further reward its shareholders.
The bonus issue entails the issuance of 640 million new bonus shares and is to be undertaken on the basis of two bonus shares for every five existing shares held.
On the stock market today, Boustead Plantations rose 12 sen or 7.5% to close at RM1.73 on some 5.55 million shares traded.