KUALA LUMPUR: Boustead Plantations Bhd stated that due to high stock levels in Malaysia and Indonesia, palm oil prices are projected to be highly volatile for the rest of the year. Following a fall in profitability in the most recent quarter.
The plantations firm said that high production costs brought on by higher minimum wages combined with higher fertilizer and diesel prices will continue to be a burden throughout the course of the rest of the year. In a filing with Bursa Malaysia, it stated”the group’s profitability is based on the crude palm oil (CPO) price direction and crop production.”
The Boustead Plantations Bhd is however hopeful that its ongoing efficient cost management and crop enhancement measures will bring favorable results in 2022. The company says that the deployment of Plantation Performance Improvement Programs has led to some improvements in fresh fruit bunch (FFB) yield in the Peninsular Malaysia and Sabah regions this year.
The conflict between Ukraine and Russia, climatic changes in Europe, China, India, and the US, as well as price increases in other crops, were also mentioned as potential factors that could cause a global crop shortage.
The group reported a net loss of RM352,000 for the third quarter that ended on September 30, 2022. Versus a net profit of RM95.56 million in the quarter of FY21. Reduced FFB production and palm product pricing resulted in an RM1.4 million profit from operations. Down from RM133.1 million in the comparable quarter previous year.
Lower palm product prices had a negative impact on the prices of FFB, CPO, and palm kernel. Revenue for the quarter was RM240.25 million, down from RM293.77 million in the corresponding period last year. In the nine months leading up to September 30, 2022, Boustead Plantations’ net profit was RM508.02 million on revenue of RM913.37 million. Up from RM156.16 million in the same period of 2021 and RM708.49 million in revenue.