KUALA LUMPUR: Boustead Plantations Bhd
(BPlant) aims to costs, boost productivity through mechanisation, and replant less productive oil palm stands to counter potential risks in the palm oil market.
“To cushion the potential downside in the palm oil market, the group will continue to focus on cost rationalisation and will strive for improved productivity through continued mechanisation initiatives and replanting older, less productive oil palm stands,” BPlant said in a filing with Bursa Malaysia.
Despite the expected presence of the El Niño weather pattern, Malaysia's palm oil production is projected to rise in 2024.
“This growth can be attributed to the improved workforce and the increased maturity of palm trees available for harvesting. The potential adverse effects of dry conditions associated with El Niño on Malaysian palm trees is expected to be mild with the arrival of the monsoon season,” BPlant said.
The plantation group said palm oil prices were experiencing a downturn due to a combination of factors, including the current high crop season, rising palm oil stocks, and dragged by erosions in vegetable oil complex.
On a positive note, BPlant noted that the demand for biodiesel blending had surged owing to elevated gasoil prices, resulting in increased palm oil consumption. Nevertheless, it might require some time for the bullish impact on the market to fully materialise.
In the third quarter ended Sept 30, BPlant posted a net profit of RM15.2mil against a net loss of RM352,000 posted in the same corresponding quarter last year.
Its revenue was lower at RM202.5mil from RM240.2mil a year prior while earnings per share stood at 0.68 sen against loss per share of 0.02 sen last year.
For the first nine months, it posted a net profit of RM14.9mil, down from RM508.02mil while revenue fell 33.9% to RM603.5mil from RM913.4mil.
