KUALA LUMPUR (Feb 15): Gains from the disposal of lands and a subsidiary company, as well as higher palm product prices, enabled Boustead Plantations Bhd to return to the black in the fourth quarter ended Dec 31, 2016 (4QFY16).

The group reported a net profit of RM50.29 million for the quarter, versus a net loss of RM975,000 a year earlier.

It said gains realised on the disposal of lands in Kulaijaya, Johor, along with the disposal of 76.1% equity interest in Boustead Sedili Sdn Bhd to Permodalan Darul Ta’zim Sdn Bhd for RM60 million, amounted to RM158 million.

“Higher palm product prices also contributed to the stronger profit,” it added in a filing to Bursa Malaysia.

Average selling price for crude palm oil (CPO) in 2016 was RM2,584 per tonne, up 20% from RM2,148 in 2015. Meanwhile, average palm kernel (PK) price rose 60% to RM2,460 per tonne.
 
Fresh fruit bunches (FFB) production fell to 908,576 tonnes, mainly due to adverse weather caused by prolonged El Nino phenomenon, ongoing land disputes in Sarawak and labour shortage.
 
Average oil extraction rate was 21.5%, whereas kernel extraction rate was 4.4%, marginally lower than in 2015.  

Revenue for 4QFY16 rose 20.4% to RM196.65 million, from RM163.38 million a year earlier.

For the full year (FY16), Boustead Plantations’ net profit surged 189.8% to RM227.79 million, from RM78.61 million in FY15. Revenue climbed 15.1% to RM707.88 million, from RM615.2 million.

Boustead Plantation declared a fourth interim dividend of 3.5 sen per share, payable on March 16. This brings total payout for FY16 to 14.5 sen per share.
 
“We are pleased with our performance in 2016. Not only did we successfully ride the wave of improved CPO prices, the disposal of lands most certainly contributed to our bottom line,” said Boustead Plantations’ vice chairman Tan Sri Lodin Wok Kamaruddin.
 
Moving forward, he said prospects for the group are positive, as CPO prices are expected to remain high for 1QFY17, largely due to slower production and dwindling palm oil stocks.
 
“However, we are mindful that this could be impacted in the second half of the year, on the back of the expected bumper crop of palm oil in Malaysia and Indonesia,” he added.
 
The peninsular region continues to be the main contributor to the group, posting profit of RM73.7 million, up 108.8% from RM35.3 million in FY15, driven by higher palm product prices. FFB production was 385,653 tonnes.
 
“The Sabah region also delivered a higher profit for the year, amounting to RM72 million, marking a substantial jump from RM29 million in the previous year. This was mainly due to better palm product prices. FFB crop stood at 384,339 tonnes,” the group said.
 
“Meanwhile, the Sarawak region recorded a profit of RM8 million, an improvement from the loss of RM4 million (in FY15), on the back of higher palm product prices. FFB crop came in at 138,584 tonnes,” it added.