KUALA LUMPUR, May 23 — The rally in crude palm oil (CPO) and gains from the disposal of Kulai Young land saw Boustead Plantations Bhd’s net profit soaring 3,460 per cent to RM435.16 million in the first quarter ended March 31, 2022 (Q1 FY22) from RM12.23 million a year ago. Revenue surged to RM324.16 million compared to RM171.94 million in the previous year due to an increase in palm products prices and fresh fruit bunches (FFB) production, which led to a profit from operations of RM151.3 million. Meanwhile, gain on disposal of Kulai Young land amounted to RM364.1 million, it said in a filing with Bursa Malaysia today. It said the average CPO price for the first quarter was RM6,030 per tonne, 61 per cent higher than last year’s corresponding quarter of RM3,751 per tonne.

The highest monthly average CPO price of RM6,780 per tonne was recorded in March 2022, which surpassed last year’s highest monthly average CPO price of RM5,159 per tonne recorded in November 2021.

Palm kernel’s average price stood at RM4,655 per tonne, or an 85 per cent surge, versus previously.

Boustead Plantations said FFB production for the quarter of 195,882 tonnes increased by nine per cent more than the production in the first quarter of 2021 of 180,165 tonnes, contributing a yield of 2.9 tonnes per hectare as compared with 2.7 tonnes per hectare in the same quarter last year.

"This improvement was the effect of the Plantations Performance Improvement Programme (PPIP) laid out in the group’s 2022 Business Plan, which focuses on yield enhancement.

"Oil extraction rate and palm kernel extraction rate increased from 20.3 per cent to 20.6 per cent and from four per cent to 4.1 per cent respectively,” it noted. By region, Peninsular Malaysia achieved a segment profit of RM75.7 million, an increase of RM49.9 million from a profit of RM25.8 million for the corresponding quarter last year, while the Sabah region posted a segment profit of RM71.3 million, surpassing last year’s RM5.8 million, and Sarawak’s segment profit of RM4.3 million improved versus last year of RM1.8 million.

Boustead Plantations said prices of palm oil will remain strong for the remaining second quarter of 2022 in respect of the ongoing Ukraine-Russia conflict and the tightness of CPO production that would dampen the increasing demand for edible oil.

However, the sentiment on Indonesia lifting the ban on the export of palm oil products will add bearishness to the palm oil prices. "Palm oil supply is expected to improve over the second half of the year due to easing of labour shortages with the entry of foreign workers back to Malaysia.

"Market is expected to stabilise earliest in July 2022 and palm oil demand set to increase due to the good price spread between soybean oil, also on the switching application of sunflower oil to palm oil in relation to European conflicts,” it said. Overall, the group is encouraged by the bullish price trend and encouraging crop production in the first quarter of 2022.

It will remain focused on PPIP to further improve the productivity in the coming quarters to take advantage of the strong CPO price. — Bernama