Boustead Plantations falls into the red in Q2 on lower palm prices

PETALING JAYA: Boustead Plantations Bhd fell to the red in the second quarter (Q2) ended June 30, 2018 with a net loss of RM22.24 million against a net profit of RM10.78 million a year ago, due to the decline in palm product prices and lower production, particularly for the Peninsular region.
Revenue for the quarter under review fell 16.4% to RM141.75 million from RM169.49 million.
Boustead Plantations has proposed to declare a second interim dividend of 2.5 sen per share for the financial year ending December 31, 2018, which will be paid on September 25.
It told Bursa Malaysia that it achieved an average selling price of RM2,457 per metric tonne (MT) for crude palm oil (CPO), down by RM512 or 17% from RM2,969 per MT for the corresponding period of 2017, while palm kernel's average price fell 24% to RM2,100 per MT.
Boustead Plantations said CPO price came under pressure in Q2 due to lacklustre exports caused by the reinstatement of CPO export duty in May 2018 and the US-China trade conflicts which had led to a sharp drop in soy prices.
For the first six months of 2018, the group reported a net loss of RM16.98 million against a net profit of RM40.34 million, while revenue declined 17.3% to RM296.36 million from RM358.51 million.
Commenting on prospects, Boustead Plantations said it is looking to gain from a the proposed sale of the 138.89 hectares of Malakoff Estate, which is expected to uplift its profit for the year.
It opined the price direction for palm oil for the rest of the year is likely to be governed by the production trend from Indonesia and Malaysia, soyabean supplies, biodiesel offtake in Indonesia, Indian demand, development of US-China trade tensions and its implications on prices of crude mineral oil.
"The group is cautiously optimistic that palm oil prices will pick up in the last quarter of 2018. While the group's productivity is influenced by the availability of labour and difficult operating conditions in Sarawak, the recently acquired Pertama estates will contribute towards the group's crop production," it added.
At the noon break, Boustead Plantations shares were unchanged at RM1.26 on 235,200 shares traded.