In a recent announcement to Bursa Malaysia, Borneo Oil Berhad (BornOil) said that its profit before tax for its third quarter 2022 ended 31 March 2022 soared more than three folds to touch RM34.93 million, as compared to the immediate preceding quarter’s RM10.40 million. This achievement was made on the back of revenue of RM22.34 million, a rise of RM3.98 million as compared to the immediate preceding quarter’s RM18.37 million.
This surge in profit was mainly due to the fair value gain on investment in quoted securities of RM35.30 million for the quarter under review, as compared to the RM12.12 million profit for the previous quarter.
Meanwhile, the quarter’s higher revenue was mainly derived from the full resumption of installation activities on-site for the project management of an Integrated Limestone Processing Plant (ILPP). The ILPP is scheduled for completion in the third quarter of 2022.
Last month, BornOil had entered into a supplemental agreement to acquire a stake in a group which owns the only integrated clinker and cement plant in Sabah. The company had entered into the agreement with Labuan-based MT 23 Resources Ltd (MT23) for the acquisition of 19.55 million shares representing a 19.5 per cent equity interest in Makin Teguh Sdn Bhd (MTSB) for a total purchase consideration of RM50.70 million. BornOil also has an option to purchase an additional 10.43 per cent of the equity interest in MTSB for a period of twenty-four months.
The ILPP is located at Lahad Datu – the only one of its kind in Sabah. Currently, there are 12 integrated clinker and cement plants in Malaysia of which nine are in West Malaysia and two in Sarawak.
“The outlook for Sabah’s clinker and cement industry is favourable given the high cement prices in Sabah compared with the rest of Malaysia and ILPP’s proximity to the Brunei – Indonesia – Malaysia – Philippines East ASEAN Growth Area (BIMP-EAGA),” the company had said in a statement last month.
Sabah has an annual demand of between 1.2 million to 1.4 million metric tons of cement per year. These numbers do not include the future development projects planned on the East Coast of Sabah, and the demand in the BIMP-EAGA region with close proximity to the east coast of Sabah.
BornOil is today the largest private owner of limestone reserves of cement grade quality in Sabah and has heavily invested in the resource.
Meanwhile, for its third quarter, BornOil’s Food and Franchise Operations recorded a revenue of RM11.69 million and a profit before tax of RM0.44 million for the current quarter against a revenue of RM8.77 million and a loss before tax of RM1.49 million for the corresponding quarter. The higher reported revenue for the current quarter reflects the improved market sentiments with the easing of the Movement Control Order which also coincided with the festive season in the quarter under review.
Finally, BornOil’s Resources & Sustainable Energy division reported a revenue of RM1.43 million and a loss before tax of RM0.36 million for the current quarter against a revenue of RM3.99 million and a profit before tax of RM0.05 million for the corresponding quarter.
Looking ahead, its board is cautiously optimistic that the group will continue to deliver satisfactory performance for the financial year ended 2022.
