KUALA LUMPUR: Boustead Plantations Bhd delivered a stronger performance for its second quarter ended June 20 2021 with a higher net profit of RM49 million.

This reflects a substantial jump from the RM4 million net profit recorded in the same quarter last year.

Boustead Plantations said its pre-tax profit increased to RM64 million on the back of a higher revenue of RM243 million, while profit from operations grew to RM76 million.

For its first six months, the group recorded an improved net profitof RM60 million compared with a deficit of RM8 million in the previous year’s corresponding period.

Group pre-tax profit rose to RM83 million while revenue climbed to RM415 million, with a higher profit from operations of RM109 million for the first half of the financial year.

“The group’s performance for the second quarter also improved significantly from the results of the immediate preceding first quarter, which recorded a net profit of RM11 million and pre-tax profit of RM19 million, with a revenue of RM172 million,” Boustead Plantations said in a statement today.

The improved performance is driven by favourable palm product prices. 

It said average crude palm oil (CPO) selling price for the second quarter was up 70 per cent to RM4,014 per tonne from RM2,367 per tonne in the same quarter last year.

Average palm kernel price increased 96 per cent to RM2,647 per tonne. Fresh fruit bunches (FFB) production for the quarter stood at 231,702 per tonne while FFB yield came in at 3.4 tonne per hectare (ha).

Average oil extraction rate increased to 21.2 per cent while kernel extraction rate stood at 4.1 per cent.

The group said during the first half the year, higher collection from customers also contributed to improved net operating cash flow, which allowed it to fund working capital internally and pare down borrowings.

Its debt-to-equity ratio improved to 0.45 times, reduced from the December 31 2020 position of 0.48 times.

The group’s net current liabilities stood at RM574 million as at 30 June 2021, reflecting a reduction of RM37 million from RM611 million as at December 31 2020.

Boustead Plantations declared a second interim single tier dividend of 2.3 sen per share for the year ending December 31 2021, payable on September 30.

Boustead Plantations chief executive officer Zainal Abidin Shariff said the strong performance was a result of the yield improvement programmes carried out as part of the Reinventing Boustead Strategy.

“CPO prices appreciated further in the second quarter of 2021 due to a recovery of palm oil purchases, mainly from India, China and Europe,” Zainal Abidin said.

For the medium term, he said the prospects remained uncertain given the impacted supply affecting the palm oil sector, particularly in Malaysia.

“Weather conditions, particularly in the northern hemisphere, are also expected to affect the production of oilseeds, vegetable oils and oil meals due to soil moisture deficits. There is still a possibility of La Nina returning in the last quarter of 2021, which could lead to heavy rains and flooding in oil palm growing areas in Southeast Asia.”

“Currently, low global inventories are keeping CPO prices at an elevated level, which is expected to contribute positively to the group’s bottom line. CPO prices will continue to be influenced by changes in the import and export tax structures of consuming and producing countries and the global supply-demand dynamics of competing edible oils.”

To strengthen its performance and in line with the Reinventing Boustead Strategy, Zainal Abidin said Boustead Plantations would continue to drive productivity improvement initiatives in tandem with ongoing cost optimisation measures, as well as tapping into opportunities for recruitment of local workers.

“Our aspiration is to transform Boustead Plantations into a sustainable technology-based plantation company by ramping up mechanisation efforts, while steadfastly upholding environmental, social and governance (ESG) principles throughout our operations,” he added.

Boustead Plantations parent Boustead Holdings Bhd group managing director Datuk Seri Mohammed Shazalli Ramly commented: “Moving forward, guided by the Reinventing Boustead Strategy, Boustead Plantations will continue to focus on its sustainable growth plans by exploring new high technology and digital-based start-up ventures that will help put the company on a stronger footing to propel the Group’s sustainable growth.”

Source: NST