KUALA LUMPUR (May 23): Boustead Plantations Bhd’s net profit tumbled 98.8% to RM5.22 million or 0.23 sen per share for the first quarter ended March 31, 2023 (1QFY2023), due to a significant drop in palm product prices and the adverse impact of fresh fruit bunches (FFB) valuation.

In comparison, the group posted a net profit of RM435.16 million or 19.43 sen per share for 1QFY2022, on the back of a RM364.1 million gain from the disposal of 664ha of plantation land in Johor.

Boustead Plantations declared a first interim dividend of one sen per share, to be paid on June 23.

Quarterly revenue fell 38.38% to RM199.74 million from RM324.16 million on lower average crude palm oil (CPO) and palm kernel prices, the group said in a bourse filing.

It said the average CPO prices stood at RM4,017 per tonne, compared with RM6,030 in 1QFY2022, while average palm kernel price fell to RM2,126 per tonne from RM2,529.

FFB production, meanwhile, slipped 3% to 190,400 tonnes from 195,882 tonnes a year earlier.

“Despite this, the yield for 1QFY2023 actually experienced a slight uptick, reaching three tonnes per hectare as opposed to the 2.9 tonnes per hectare recorded in the same quarter of the previous year.

“The oil extraction rate and kernel extraction rate reduced marginally from 20.6% to 20.4% and from 4.1% to 4% respectively,” said Boustead Plantations in a statement.

Looking ahead, the group said it is optimistic that the gradual return of foreign workers would lift the FFB yield, which could partially offset the impact of lower CPO prices and rising costs.

“As we continue to navigate the complexities of the palm oil industry, our strategic trajectory is defined by our yield improvement initiatives, along with progressive digitalisation and mechanisation initiatives.

"These strategic efforts are crucial in ensuring our sustained performance and growth over the longer term,” said Boustead Plantations acting chief executive officer Fahmy Ismail.

Boustead Plantations shares finished down two sen or 2.56% at 76 sen on Tuesday (May 23), bringing the group a market capitalisation of RM1.69 billion.