BPlant posts strong 3Q helped by higher CPO prices, production

by FARA AISYAH / graphic by MZUKRI MOHAMAD

BOUSTEAD Plantations Bhd (BPlant), much like its peers, posted a strong financial third quarter (3Q) driven by higher selling prices of its edible oils and fruit production.

The company posted a RM17.97 million net profit for the 3Q ended Sept 30, 2020 (3Q20), versus a RM34.31 million net loss a year ago on higher crude palm oil (CPO) average selling price (ASP) and fresh fruit bunches (FFB) production.

Revenue in the period rose by 47.72% year-on-year (YoY) to RM205.68 million as its CPO realised a 37% higher ASP of RM2,772 per metric tonne (MT) which surpassed last year’s corresponding quarter price of RM2,026 per MT.

Palm kernel’s ASP of RM1,481 per MT was higher by RM343 per MT (30%) in the period.

BPlant’s FFB production for the quarter stood at 273,625MT compared to 239,572MT in 3Q19. FFB yield improved from 3.3 MT/ha in 3Q19 to 4.1 MT/ha in the current quarter, the grower’s exchange filing yesterday noted.

Oil extraction rate and kernel extraction rate at its mills, however, declined from 21.9% to 21.2% and from 4.5% to 4.3% respectively in the period.

The group said its prospect for the rest of the year will be much driven by CPO price, crop production and the group’s successful execution of the transformation programme.

The plantation company added that its transformation programme is progressing well, and despite some disruption to its productivity improvement initiatives due to restrictions during the pandemic, it is focused to remain on track to achieve its objectives.

“CPO prices for the rest of the year are expected to remain supportive with steady demand for palm oil seen from China, India, Europe and Pakistan. Strong global demand and lower than expected production kept Malaysian palm oil inventories extremely tight,” BPlant stated in an exchange filing yesterday.

Weather developments are becoming a major determining factor for CPO and other vegetable oil prices in the remaining quarter particularly with the current La Nina weather pattern.

BPlant noted that the recent downward revision of crop estimates for soybean, sunflower seed and other oilseeds has triggered heavy buying and elevated the price of CPO to the RM3,000 zone.

The group said the recent surge of global Covid-19 cases may need to be closely watched as this could significantly reduce global demand, particularly from hotels, restaurants and catering sectors.

For the nine-month period, BPlant’s net profit decreased 46% YoY to RM15.5 million despite revenue increasing 34.5% YoY to RM535.43 million.

The counter dipped one sen or 1.68% to close at 58 sen yesterday, with a RM1.31 billion market capitalisation.