KUALA LUMPUR (Aug 22): Boustead Plantations Bhd’s second quarter net profit doubled to RM97.5 million, from RM48.6 million a year earlier, due largely to gains on disposal of land, totalling RM83.2 million.

Revenue for the three months ended June 30, 2016 (2QFY16) increased 14.0% to RM174.9 million, from RM153.4 million in 2QFY15, it said in a filing today.

The group has declared a second interim dividend of 3 sen per share, with Sept 5 as the ex-date and Sept 20 as payment date.

For the first half of the financial year (1HFY16), the group’s net profit grew 150.5% to RM140.1 million, versus RM55.9 million in 1HFY15. This included a gain on disposal of land amounting to a total of RM117.8 million.

Fresh fruit bunches (FFB) production during the six months fell 17% to 398,418 tonnes, from 480,853 tonnes for 1HFY16, due largely to extreme dry weather effects of the El-Nino phenomenon, land disputes in Sarawak and labour shortage for tall palms.

Boustead Plantations said that average oil extraction rate (OER) of 21.4% and kernel extraction rate (KER) of 4.4% was marginally lower, compared with 1HFY15.

Crude palm oil (CPO) achieved an average selling price of RM2,424 per tonne in 1HFY16, an increase of RM218 per tonne or 10% from RM2,206 per tonne in 1HFY15, whilst palm kernel achieved an average price of RM2,120 per tonne, up by RM527 per tonne or 33%.

“Our improved earnings for the first half of the year were due to the land disposal, as well as higher palm product prices,” said Boustead Plantations vice-chairman Tan Sri Lodin Wok Kamaruddin.

“Although concerns persist over the uncertain global economy, lower crude oil prices and competition from soybean and other vegetable oils, the group is optimistic that CPO will continue to trade within a reasonable band, particularly in light of depleting reserves in China and India, coupled with lower than expected palm oil inventories in Malaysia and Indonesia.”

“We also expect some improvements in crop production for the second half of the year, although the ongoing disputes in certain Sarawak estates will continue to be a mitigating factor,” added Lodin.

As of 3.16 p.m., Boustead Plantations’ share price was up 1.54% at RM1.55, with 749,900 shares traded. — theedgemarkets.com

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