KUALA LUMPUR (July 9): Johor Plantations Group Bhd (KL:JPG) is exploring alternative revenue sources from its unutilised land, diversifying beyond traditional plantation uses, according to its managing director Mohd Faris Adli Shukery.
“Yes, we are [looking at alternative revenue sources]. As you can see, converting [unutilised land] for energy [purpose] will be able to increase our revenue income to the group,” Faris told reporters after the company’s listing on Bursa Malaysia’s Main Market on Tuesday, addressing plans to lease lands for large-scale solar (LSS) ventures.
The company, which owns 56,000 hectares of plantation land, plans to assess the “right scheme” before committing to solar power generation.
Maybank Investment Bank Bhd previously stated that LSS could generate up to 54 times more operating profits per hectare, compared to oil palm.
So far, only SD Guthrie Bhd (KL:SDG), formerly known as Sime Darby Plantation Bhd, has made public its renewable energy ambition with a one-gigawatt (GW) capacity target.
For the financial year ended December 31, 2023 (FY2023), Johor Plantations saw a 66.2% drop in net profit to RM167.31 million, attributed to lower delivery volumes from adverse weather and lower crude palm oil prices.
First-quarter net profit for 2024 more than doubled to RM49.97 million, with revenue rising to RM294.91 million, due to higher sales of crude palm oil and palm kernel.
Proposed windfall profit levy to impact Johor Plantations
Meanwhile, the proposed windfall profit levy (WPL) on palm oil is expected to impact local plantation players, said Johor Plantations chairman Tan Sri Dr Ismail Bakar.
“WPL will impact the company’s earnings as a whole, but it depends on how much the government imposes the levy rate,” Ismail said.
Faris stated that the company has yet to discuss the WPL with the government.
Last Saturday (July 6), Plantation and Commodities Minister Datuk Seri Johari Abdul Ghani reportedly said that his ministry will collect data related to the costs involved from all palm oil industry players, before any decision regarding the WPL is sent to the Ministry of Finance (MOF).
Johari previously said that Malaysia will become uncompetitive compared to other producer countries, if the WPL on palm oil is not revised.
Currently, a WPL rate of 3% is imposed on palm oil priced above RM3,000 per tonne in Peninsular Malaysia, and above RM3,500 per tonne in Sabah and Sarawak.