Chin Teck Plantations' net profit slipped 8pc to RM25.3mil in Q1

NST Mon, Jan 30, 2023 07:30pm - 1 year View Original


KUALA LUMPUR: Chin Teck Plantations Bhd's net profit slipped eight per cent year-on-year (YoY) to RM25.3 million for the first quarter (Q1) ended November 30, 2022 (FY23)  from RM27.48 million a year ago due to lower profit contribution by the joint ventures engaged in oil palm plantation in Indonesia and the associate engaged in property development.

Since the previous financial years, the company said the unrest in the surrounding villages in the vicinity of the plantations in Lampung Province, Indonesia, had disrupted the routine harvesting of fresh fruit bunches (FFB).

The oil palm plantations have since commenced harvesting activities and mill operations.

The total area accessed is approximately 53.61 per cent of the total planted area.

"However, as reported previously, harvesting the mature fields in the oil palm plantation of the joint venture located in South Sumatera Province, Indonesia, has been delayed due to the unrest in the villages neighbouring the estate.

"Commencement of harvesting is pending clearance by the relevant authorities," it said in its bursa filing.

Revenue in the quarter improved by 8.17 per cent to RM62.96 million from RM58.2 million a year ago due to significant increases in the sales volume of FFB, crude palm oil (CPO) and palm kernel even though the average selling prices decreased.

The company said the cost of sales increased substantially due to an increase in the plantation operating expenses, especially the rising cost of fertiliser.

Meanwhile, other income decreased because, in the previous corresponding financial quarter, there was an amount of fair value gain on consumable biological assets, which did not recur.

The company said that in the current financial quarter, it incurred a fair value loss on consumable biological assets, which had been included in other expenses.

The company expected performance to decline for the financial year ending August 31, 2023, compared with the record profit of the previous year ended August 31, 2022.

Chin Teck said this would align with the drop in CPO and palm kernel prices from historically high levels.

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