Boustead Plantations’ 1Q net profit plummets 99% amid significant drop in palm product prices
23 May 2023
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8 June 2023KUALA LUMPUR: Boustead Plantations Berhad (BPlant) said its profitability for this year is dependent on the price direction for crude palm oil (CPO) and crop production.
“Palm oil production in the first quarter of 2023 had been adversely impacted by the heavy rainfall and flooding phenomenon in parts of Malaysia. However, CPO production is forecasted to trend higher in second half of 2023 following the expected improvement in weather condition in the months ahead,” BPlant said in a Bursa filing.
The plantation group said palm oil prices remained favourable in the first quarter of 2023 driven by lower production of other vegetable oil in Ukraine due to ongoing war with Russia, rising biodiesel demand and increase in edible oil imports by China, among others.
“Nevertheless, CPO prices are forecasted to weaken in the second half of 2023 due to expected higher CPO production season, high inventory level and subdue demand.
“The group is optimistic that the gradual return of foreign workers would lift the fresh fruit bunches (FFB) yield, which could partially offset the impact of lower CPO prices and rising costs,” BPlant said.
In a separate statement, it said average CPO price for the first quarter stood at RM4,017 per tonne, compared with last year’s corresponding quarter’s RM6,030 per tonne.
Palm kernel’s (PK) average price of RM2,126 per tonne was lower by RM2,529 per tonne. These price reductions adversely impacted the group’s revenue in the current quarter.
Source: The Star