KUALA LUMPUR: Boustead Plantations Bhd (BPB) remains confident of its prospects, despite posting a lower net profit in the first quarter ended March 31, 2018.
Its net profit fell to RM2.35 million from RM29.08 million recorded in the same period last year, BPB said in a filing to Bursa Malaysia today.
The decline was mainly due to lower prices of palm products, it added.
The group’s revenue in the same quarter decreased to RM154.60 million from RM189.02 previously.
In a separate statement, BPB vice chairman Tan Sri Lodin Wok Kamaruddin said it was a challenging first quarter as lower palm product prices had impacted the group.
“The year ahead is expected to see an increasing supply of alternative vegetable oils, putting pressure on demand for CPO (crude palm oil) and leading to increased palm oil inventories. However, the CPO market could benefit from the likelihood of higher tariffs by China on US soybean as well as the European Union’s removal of anti-dumping duty on Indonesian biodiesel,” he said.
Moving forward, Lodin said the group was confident on its prospects as it remain focused on strengthening operational efficiencies coupled with strategic expansion of its plantation land bank.
“To this end, the recent acquisition of 11,579 hectares of land in Sabah is set to contribute positively to the group, while the proposed acquisition of 5,500 ha of plantation land and a palm oil mill in Sabah will further boost our earnings over the long-term.
“The proposed disposal of 139 ha of land targeted to be completed by the third quarter of 2018 is also expected to contribute further to our earnings,” he said.
BPB declared a first interim dividend of 2.5 sen per share for the year ending December 31, 2018. It will be paid on June 27.
Elaborating on the results, the group said the peninsular region recorded a lower profit of RM11 million. This was mainly a result of significantly lower palm product selling prices.
Fresh fruit bunch (FFB) crop increased by three per cent to 92,906 tonne.
The Sabah region posted an operating profit of RM3 million, a decline from the previous year’s corresponding quarter. While FFB crop grew by 24 per cent to 104,652 tonne, this was impacted by reduced selling prices and higher operating expenditure.
The Sarawak region registered a deficit of RM5 million due to lower palm product prices and crop production. FFB crop for the period dropped to 28,765 tonne.