KUALA LUMPUR: Boustead Plantations Bhd narrowed its net loss to RM9.55 mil in the first quarter ended March 31, 2020, from a loss of RM16.2 mil a year earlier amid bottomline improvements across its operations in Peninsular Malaysia, Sabah and Sarawak.
Revenue also improved 20.6% year-on-year (y-o-y) to RM162.69 mil due to higher palm product prices, which led to a profit from operations of RM17.28 mil compared to an operating loss of RM863,000 in the corresponding period last year.
“The rapid spread of Covid-19 in the final weeks of 1Q has exerted a ravaging impact on most commodities including palm oil, pushing down global demand and suppressing commodity prices precipitously,” it said in a filing with Bursa Malaysia today.
The group, which incurred losses for the last two financial years, said it remained committed to its transformation programme, which is in the first phase, in order to achieve better performance over the long-term.
“Looking ahead, the Covid-19 pandemic will continue to impact industries and markets across the globe. The Malaysian palm oil industry has been affected by reduced demand from palm oil importing countries as well as a slowdown in domestic consumption,” Boustead Plantations said in a statement.
The group added that the Movement Control Order, enforced to prevent the spread of the pandemic, had also disrupted oil palm operational activities, particularly in Sabah where palm oil operations in six districts were shut down from March 25 to April 14.
Boustead Plantations, which is a 57.42%-owned subsidiary of Boustead Holdings Bhd, manages 20 oil palm estates in Sabah, spanning 41,800ha. The Sabah operations recorded the highest fresh fruit bunches (FFB) output last year compared to its operations in the peninsula and in Sarawak.
While the Sabah operations remained the top FFB crop producer in 1Q20, FFB production in the region fell 18% y-o-y to 105,140 metric tonnes.
Boustead Plantations said the decline in palm oil demand and global consumption were expected to put pressure on palm oil prices over the coming months.
“While the uncertain climate post-Covid-19 may hinder (its) recovery, the group expects to record some growth in crop production as it continues to focus on yield improvement, cost management and operational efficiency,” it added. – June 2, 2020, Bernama
