KUALA LUMPUR (Nov 22): Boustead Plantation Bhd (BPlant) returned to the black in the third quarter ended Sept 30, 2023 (3QFY2023) with a net profit of RM15.22 million, from a net loss of RM352,000 a year ago, mainly due to yield and oil extraction rate (OER) improvement, as well as a favourable impact of fresh fruit bunches (FFB) valuation.

The net profit for the quarter is also an improvement compared with the net loss of RM5.52 million reported in 2QFY2023, and net profit of RM5.22 million in 1QFY2023.

Revenue for 3QFY2023 was 15% lower at RM202.55 million against RM240.25 million a year ago, according to the group’s filing with Bursa Malaysia on Wednesday.

Average crude palm oil price in 3QFY2023 stood at RM3,861 per tonne, a decrease of 6% from RM4,089 per tonne in 3QFY2022, while the palm kernel average price declined 16% to RM2,101 per tonne.

FFB production fell 4% to 218,130 tonnes, from 227,335 tonnes.

Nevertheless, yield improved to 3.6 tonnes per hectare, compared with 3.4 tonnes in 3QFY2022, due to a reduction in past prime mature areas, as a result of ongoing replanting activities. The OER increased to 21.0%, from 20.5%.

For the first nine months of FY2023, BPlant posted a net profit of RM14.91 million, significantly lower than the RM508.02 million reported for the previous corresponding period. Revenue dropped 34% to RM603.52 million, from RM913.37 million.

In a statement, BPlant acting chief executive officer (CEO) Fahmy Ismail said: “Looking ahead to 2024, despite the El Niño weather phenomenon, Malaysia’s palm oil production is projected to rise, on the back of improved workforce and increasing maturity of palm trees available for harvesting. The potential impact of dry weather conditions associated with El Niño on Malaysian palm trees is also expected to be relatively mild, with the arrival of the monsoon season”.

“Building on our momentum, the group is committed to continue strengthening our foundation through enhancing cost optimisation and driving productivity by scaling up mechanisation, in addition to our ongoing replanting programme to replace older and less productive oil palms,” he added.

Boustead Holdings Bhd group CEO Izaddeen Daud said the turnaround in 3QFY2023 is a testament to the group’s relentless commitment to maximising shareholder value.  

“Despite anticipated challenges, BPlant is currently moving on the right trajectory by focusing on operational improvements to enhance its long-term prospects,” said Izaddeen.

On Nov 10, Lembaga Tabung Angkatan Tentera (LTAT) made an unconditional mandatory takeover offer for the BPlant shares that it does not own, at RM1.55 per share.

This follows LTAT’s agreement with Boustead Holdings to acquire 739.2 million shares or a 33% stake in BPlant, after the RM1.15 billion takeover bid by Kuala Lumpur Kepong Bhd (KLK) fell through last month.

BPlant shares closed unchanged at RM1.53 on Wednesday, valuing the group at RM3.43 billion.

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Boustead Plantations receives unconditional takeover offer from LTAT at RM1.55 per share