Boustead Plantations Berhad (BPB) today announced its financial results for the first quarter ended 31 March 2022 (Q1FY2022), continuing its run of growth in performance by recording a Profit After Taxation and Zakat (PAT) of RM436 million, which is a significant increase from a PAT of RM11 million gained in the previous year’s corresponding quarter (Q1FY2021).
During the quarter, the Group’s Profit Before Taxation and Zakat (PBT) increased to RM509 million, which included the gain on disposal of Kulai Young land of RM364 million. Excluding the gain, the PBT of RM145 million surpassed the RM19 million achieved in the same period last year. Revenue climbed to RM324 million from RM172 million, while profit from operations improved to RM151 million in comparison to RM33 million attained in the first quarter of the previous financial year.
The Group’s strong performance was driven by increase in palm products prices. For Q1FY2022, average crude palm oil (CPO) price surged by 61% to RM6,030 per metric tonne (MT), as opposed to RM3,751 per MT in last year’s corresponding quarter. Average palm kernel price was also substantially higher at RM4,655 per MT, up by RM2,135 or 85%. These led to higher earnings per share of 19.43 sen as opposed to 0.55 sen recorded in the same quarter last year.
The Group’s commendable performance was further complemented by the improved fresh fruit bunches (FFB) production from the success of the Plantations Performance Improvement Programme (PPIP) laid out in the Group’s 2022 business plan and higher realised palm products prices. FFB production for the quarter was recorded at 195,882 MT, which was 9% higher from the production in last year’s corresponding quarter of 180,165 MT. Oil extraction rate and kernel extraction rate grew to 20.6% and 4.1% from 20.3% and 4.0% respectively.
BPB Chief Executive Officer Zainal Abidin Shariff said the Group was encouraged by the bullish trend and encouraging crop production in the first quarter of 2022 and will remain focused on PPIP’s initiative on mechanisation and digitalisation, in line with the Reinventing Boustead Strategy.
“Through mechanisation, we have reduced the number of workers required for our operations. Compared to the same quarter last year, we had closed the gap by 30%. The Group expects to further improve productivity and realise more benefits in the coming quarters from efforts on mechanisation to take advantage on the strong CPO price,” he said.
In comparison with the immediate preceding quarter, PAT, PBT and profit from operations recorded an increase of 404%, 271% and 2% respectively. Average CPO price improved by RM986 to RM6,030 per MT as compared to the fourth quarter 2021 price of RM5,044 per MT. Meanwhile, operating costs were reduced by 10%.
During the year, higher collection from customers on strong CPO price and proceeds from disposal of Kulai Young land had improved overall cash flows, which allowed the Group to fund its working capital internally and pare down borrowings. Cash generated from operation for the quarter increased to RM98 million as compared to RM50 million recorded in the same quarter last year. Debt-to-Equity ratio improved to 0.28 times, reduced from December 31 2021 position of 0.37 times.
The Group’s net current liabilities as of March 31 stood at RM81 million, a reduction of RM400 million from RM481 million as at 31 December 2021 as a result from higher cash and bank balance and reduction in short-term borrowings.
Reflecting the Group’s strong performance and its dedication in delivering shareholder value, the Board of Directors declared a first interim single-tier dividend of 7.3 sen per share for the year ending 31 December 2022. The dividend will be paid on 24 June 2022 to shareholders on the register as at 9 June 2022.
The Group’s operational profitability is mainly driven by CPO price and crop production. Both PPIP and Boustead Group’s Reinventing Boustead Strategy are currently progressing as planned.
Zainal Abidin said, “We look forward to the bullishness of palm oil prices for the remaining second quarter of 2022 and expect that the palm oil supply to improve as a result of industry-wide mechanisation initiatives as part of our performance improvement programme.
“We aspire to transform BPB into a sustainable technology-based plantation company, thus we are ramping up mechanisation and digitalisation efforts to improve yield and cost, while steadfastly upholding Environmental, Social, and Governance (ESG) principles throughout BPB’s operations,” he concluded.
Boustead Holdings Berhad (BHB) Group Managing Director Dato’ Sri Mohammed Shazalli Ramly commented positively on BPB’s latest performance, crediting the encouraging results to progressive strategies and improvement initiatives that were implemented since last year.
“I am hopeful that the first quarter achievement will serve as a catalyst for BPB to set a new precedent in performance throughout the year 2022 and set the Group on track to become a sustainable technology-based plantation company that subscribes to the ESG principles,” Dato’ Sri Mohammed Shazalli said.
