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NEWS ADMIN

DATE

16/05/2018

NEWS PROVIDER

Siti Safura Masiron

NEWS SOURCE

The Edge Markets MY

CATEGORY

HEADLINE

Sarawak Plantation starts FY18 in the red

15.05.2018 (The Edge Markets MY) - KUALA LUMPUR (May 15): Sarawak Plantation Bhd posted a net loss of RM1.74 million for its first quarter ended March 31, 2018 (1QFY18), impacted by weak performance at its oil palm operations besides a fair value change of biological assets.

This resulted in a loss per share of 0.62 sen, compared with an earnings per share of 3.57 sen or a net profit of RM9.99 million achieved in the corresponding quarter last year.

However, the group — which sank into the red in FY17 for the first time since its listing a decade ago — still declared a first interim single tier dividend of five sen per share in respect of FY18, payable on June 11.

In a filing with the stock exchange this evening, the oil palm plantation firm said its estate operation was loss-making during the quarter at RM1.3 million against revenue of RM21.6 million, while its mill operations recorded a profit of RM2 million and revenue of RM68.4 million.

Altogether, its oil palm operations saw a 35.3% or RM38.7 million decrease in revenue, to RM70.7 million compared with RM109.4 million in 1QFY17.

The group attributed the contraction in revenue to the effect of lower realised average selling prices, coupled with lower sale volumes of crude palm oil (CPO) and palm kernel (PK), and the higher estate costs incurred during the quarter.

“Average selling prices of CPO and PK had decreased approximately by 21.9% and 30.6%, whereas the sales volumes of CPO and PK had decreased by approximately 16.9% and 12.6% respectively for the current financial period,” it said.

Sarawak Plantation also recognised biological assets of RM26.9 million as at end-March against RM24.7 million as at end-December 2017, which resulted in a change in fair value of biological assets totalling RM2.2 million booked in the quarter under review.

This was in accordance with the adoption of amendments to MFRS 141, it said.

“As a result of the decrease in operating results and fair value changes of biological assets as explained, the group recorded a loss for the current financial period,” said the plantation group in the result announcement.

Sarawak Plantation said it is confident that it could achieve better results “in the near future”, barring unforeseen circumstances.

It explained that current emphasis will be placed on organisational and operational enhancement to increase productivity and production, and allocating resources for areas that will immediately impact production and productivity.

Sarawak Plantation owns 20 oil palm estates with a total planted area of 35,687 ha in Sarawak, and two palm oil mills located in Niah and Mukah.

Shares in Sarawak Plantation were unchanged at market close today. At its last price of RM1.65, the group is valued at a market capitalisation of RM462 million.