Boustead Plantations turns red in second quarter

Boustead Plantations Bhd recorded a loss of RM26.43 million in the second quarter.

KUALA LUMPUR: Boustead Plantations Bhd recorded a loss of RM26.43 million in the second quarter ended June 30, 2018 (2Q18) from a profit of RM8.43 million in the corresponding quarter last year.

Revenue slipped to RM141.75 million from RM169.49 million previously, the plantation company said in a filing with Bursa Malaysia today.

For the six-month period (6M18), the company recorded a loss of RM24.09 million against a profit of RM37.51 million recorded in the same period last year, while revenue decreased to RM296.35 million from RM358.50 million previously amid the sharp fall in selling prices of palm products and an increase in operating expenditure.

However, better production from existing Sabah estates and contribution from the recently acquired Pertama Estates cushioned the downturn in selling prices, it said.

“Fresh fruit bunch (FFB) production for 6M18 declined by 2% to 431,349 metric tonnes (MT) while the oil extraction rate averaged 20.7% compared with 20.8% previously,” it added.

Boustead Plantations said crude palm oil (CPO) achieved an average selling price of RM2,457 per MT, a 17% decrease year-on-year from RM2,969 per MT previously.

On prospects, it said the expected gain from the proposed sale of the 138.89ha Malakoff Estate would boost the group’s profit for the year and the recently-acquired Pertama Estates would contribute towards its crop production.

It said the price direction for palm oil for the rest of 2018 was likely to be governed by the production trend in Indonesia and Malaysia, soyabean supplies, biodiesel offtake in Indonesia, Indian demand, development of United States-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,” it added.