Monday 27 May 2024
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KUALA LUMPUR (Jan 8): Johor Plantations Group Bhd has filed its prospectus exposure for its initial public offering (IPO) with the Securities Commission Malaysia (SC), with Johor Corp, through Kulim (M) Bhd, seeking to retain 65% stake post-listing. 

This confirmed The Edge report in November that JCorp is going ahead with its plantation assets IPO under Kulim despite weaker crude palm oil price environment, and letting go of a stake of about 30% to 40% in Johor Plantations.

The prospectus exposure on Monday revealed that the IPO involves up to 875 million shares in Johor Plantations, comprising an offer for sale of up to 411 million existing shares and public issue of up to 464 million new shares.

Among these shares, 797.5 million shares are slated for institutional investors while 77.5 million are allocated for the retail offering.

Within the institutional offering portion which represents 31.9% stake of Johor Plantations’ enlarged share base, 312.5 million are meant for Bumiputera investors approved by Miti and 485 million for Malaysian and foreign institutional or selector investors.

In the retail offering, 50 million shares representing 3.1% of Johor Plantations' enlarged share base will be made available for the Malaysian public, of which half of them will be set aside for Bumiputera investors.

Meanwhile, 27.5 million shares of the retail offering will be reserved for application by eligible staff of the group.

Johor Plantations is an upstream oil palm plantation company operating mainly in Johor, and the IPO aims to raise funds for it to enter into the downstream plantation business, repayment of bank borrowings and working capital.

As at Nov 10, 2023, the group operates 23 plantation estates, 22 of them in Johor and one in Pahang, with a total landbank of 59,860 hectares (ha), and a total oil palm planted area of 55,982ha.

Johor Plantations sells its crude palm oil (CPO) to third-party downstream refineries in Malaysia for further processing into edible oils or oleochemicals products, while selling palm kernel (PK) to third-party PK crushing plants in Malaysia to produce PK products.

“While we are principally involved in upstream oil palm operations, we are evaluating opportunities to venture into the downstream market, including the refinery business, in order to diversify our offerings to include downstream products such as specialty oils and fats,” said the group in the prospectus exposure.

“Through this diversification, we seek to enhance our position as a fully integrated oil palm producer and generate additional revenue across the entire value chain. 

“We believe that further expansion of our integrated business model offers us the potential to better manage commodity price volatility by giving us the flexibility to channel our CPO and PK to the various segments of our downstream processes at the appropriate time, thus benefiting from the different price characteristics and feedstock types in various downstream segments,” it said.

Johor Plantations' board of directors also expressed their intention to recommend and distribute a dividend of at least 50% of the group’s annual net profit.

For the first seven-month period of financial year ended Dec 31, 2023 (7MFY2023), net profit fell 80% to RM58.34 million from RM292.13 million in the previous corresponding period, while revenue declined 44% to RM622.36 million from RM1.11 billion.

This is in contrast with its performance in FY2022, with net profit growing 44% to RM495.59 million from RM344.8 million in FY2021, while revenue increased 13% to RM1.75 billion from RM1.55 billion.

The change in its fortunes in the past two years was mainly influenced by the prices of CPO.

Edited ByLam Jian Wyn
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