Boustead Plantation FFB and CPO output to improve in 2017

Deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin said the improved results is testament that the company

KUALA LUMPUR: Boustead Plantation Bhd’s fresh fruit bunches (FFB) and crude palm oil (CPO) production are set to improve in 2017, assuming better yield and average oil extraction rate (OER) after the effects of El Nino, said Affin Hwang Capital Research. 

The research house said on Monday that the group’s OER has always been better than MPOB’s average due to better milling efficiency in Peninsula Malaysia and Sabah, despite its FFB yield often faring below the MPOB average due to lower yields in Sabah and Sarawak.

For 2016, the group achieved OER of about 21.5% higher than MPOB’s average of 20.2%. 

“This is mainly because of higher OER for its Peninsula Malaysia and Sabah’s estates, offsetting the decline in Sarawak. 

“Among its peers, Boustead Plantations OER ranked fifth,” it said in a note.

Affin Hwang Research added that the group has been disposing some of its land to unlock the value of its land bank. 

At the moment, Boustead Plantations is in the process of disposing of 677.78 ha of its land in Penang to SP Setia’s subsidiary Setia Recreation for RM620.12mil.

“Since its listing in 2014, Boustead Plantations has consistently paid more than 98% of its profit after tax as dividend,” the research house said.

For 2016, the group declared dividend per share of 14.5 sen, which implies a yield of 8.7% based on its share price as at July 28. 

Among its peers, Boustead Plantations provides the highest dividend yield, it added.