KUALA LUMPUR (Aug 25): Boustead Plantations Bhd booked a net profit of RM7.08 million or 0.32 sen per share in the quarter ended June 30 (2QFY20), as the group returned to black at the operating level, thanks to higher production and selling prices of its palm products, as well as lower tax incurred.

The group, which unveiled a three-year transformation programme recently, recorded a net profit of RM79.23 million in the same quarter last year, due to a gain from the disposal of its plantation assets.

The group recorded an operating profit of RM19.35 million in its latest quarter — as opposed to an operating loss of RM22.09 million in 2QFY19. The latest quarterly performance was also better than the January-March period. Comparatively, operating profit rose 12% from RM17.28 million in 1QFY20.

Revenue-wise, Boustead saw a 34.78% year-on-year increase to RM167.06 million from RM123.95 million, again thanks to the improved prices of palm products.

However, for the six-month period ended June (6MFY20), Boustead remained in the red with a net loss of RM2.47 million — despite revenue rising 27.38% y-o-y to RM329.75 million from RM258.86 million — as it incurred higher finance costs in the first quarter. In contrast, it posted a net profit of RM63.03 million in 6MFY19, as earnings were lifted by the disposal gain in 2QFY19.

On prospects, Boustead Plantations expects the price of crude palm oil (CPO) to remain supported by steady demand in Asia.

“Global palm oil production for this year is estimated to be lower than last year, due to a slowing down in the increase in mature area, lack of replanting, reduced fertilizer applications and shortage of workers in many estates,” it said.

“The uncertainty of Covid-19 recovery will likely exacerbate issues on shortage of labour as new foreign workers recruitment remains restricted. However, the group remains optimistic that efforts to improve both the operational and financial efficiency will not be hampered by the above issues,” it added.

Shares of Boustead Plantations rose half a sen or 1.3% to close at 39 sen today, giving the group a market capitalisation of RM873.6 million.

Source: The Edge