PETALING JAYA: Boustead Plantation Bhd (BPlant) has bounced back to the black with a net profit of RM15.22 million from a net loss of RM352,000 a year ago in its third quarter ended Sept 30, 2023 (Q3 FY2023).
In its filing with Bursa Malaysia today, BPlant attributed it to yield and oil extraction rate (OER) improvement, reduction in operating costs coupled with favourable impact of fresh fruit bunches (FFB) valuations.
However, revenue for the quarter dropped 15% or RM37.71 million to RM202.55 million from RM240.25 million in the corresponding period a year ago (Q3 FY2022).
The group said the average crude palm oil (CPO) price during the quarter was RM3,861 per tonne (MT), a decrease of RM228 MT or 6% lower from the average price of RM4,089 per MT in Q3 FY2022.
It harvested 218,130 MT of FFB in Q3, marking a 4% drop from FFB production of 227,335 MT in Q3 FY2022.
However, yield per hectare saw a modest improvement, rising to 3.6 MT per hectare in contrast to 3.4 MT per hectare achieved in Q3 FY2022.
“The improvement of the yield was attributable to a reduction in past prime mature areas resulting from replanting,” it said.
The OER increased marginally to 21% from 20.5% in Q3 FY2022 whilst kernel extraction rate (KER) reduced by 0.1% to 3.7%.
Prospects for 2023
In Q3 FY2023, the increase in output was primarily driven by favourable weather conditions and the return of a higher number of foreign workers to estates, it said.
“However, it is anticipated that this growth may taper off slightly due to seasonal fluctuations and the prevalence of frequent intermittent rainfall,” it said.
Despite the expected presence of the El Niño weather pattern, Malaysia’s palm oil production is projected to rise in 2024, BPlant added.
“Palm oil prices are experiencing a downturn due to a combination of factors, including the current high crop season, rising palm oil stocks, and dragged by erosions in the vegetable oil complex.
“On a positive note, the demand for biodiesel blending has surged owing to elevated gas oil prices, resulting in increased palm oil consumption.
“Nevertheless, it might require some time for the bullish impact on the market to fully materialise,” it concluded.
On Nov 10, the Armed Forces Fund Board (LTAT) made an unconditional mandatory takeover offer for the BPlant shares it does not own, at RM1.55 per share.
This follows its agreement with Boustead Holdings Bhd to acquire 739.2 million shares or a 33% stake in BPlant, after the RM1.15 billion takeover bid by Kuala Lumpur Kepong Bhd (KLK) fell through last month.
At the close today, BPlant’s shares were unchanged at RM1.53 with a market capitalisation of RM3.43 billion.