KUALA LUMPUR (March 19): PLS Plantations Bhd executive chairman Tan Sri Lim Kang Hoo said today the company expects to return to profitability in financial year ending March 31, 2020 (FY20) as the group's oil palm plantation reaches maturity.

"Our oil palm are all now in their mature year, so going forward our production will go up more in coming years," Lim told reporters after PLS' extraordinary general meeting (EGM) here today.

His statement came after he sold his entire 23.42% stake in PLS Plantation for RM76.5 million to Ekovest Bhd, a construction outfit that he controls a 32.37% stake in, earlier this month. 

At the EGM earlier, PLS shareholders had approved the group's planned diversification into durian plantation business.

In a statement today, Lim said the diversification is a synergistic and logical business expansion from PLS' existing core businesses in forest and oil palm plantation.

In the long term, Lim said PLS envisions that durian plantation can be Malaysia's new revenue stream via exports.

"Post-acquisition of Dulai (Fruits Enterprise Sdn Bhd), we aim to command substantial market share for the export of downstream durian-based products. And now, we intend to vertically expand this business by focusing on enhancing the durian plantation for upstream capabilities to meet the growing trend of durian demand, which has consistently outstripped supply. We intend to go in large-scale and systematic plantations for this expansion. We are also in discussion with strategic investors who can co-invest with us in this durian plantation business.

"To date, PLS Plantations has commenced durian plantation on a large-scale, and now we have planted 30,000 acres (12,000 ha) for oil palm. In this industry, it takes gestation period for the plants to grow, and we should utilise the plantation land and its surrounding areas to do aquaculture and other farming products to diversify the risk," he said.

PLS had earlier reported losses. For 3QFY19, net loss stood at RM3.36 million versus a net profit of RM2.5 million a year earlier, according to the company's quarterly financial report. Cumulative 9MFY19 net loss stood at RM6.72 million compared to a net profit of RM8.27 million a year earlier, PLS said.

For FY18, PLS reported that full-year net loss narrowed to RM3.92 million from a net loss of RM8.29 million in the previous year.