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Quarterly Report For The Financial Period Ended 30 September 2016

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INTERIM REPORT FOR THE 3RD QUARTER ENDED 30 SEPTEMBER 2016

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

(The figures have not been audited)
Condensed Consolidated Statement of Comprehensive Income

Condensed Consolidated Statement of Financial Position

(The figures have not been audited)
Condensed Consolidated Statement of Financial Position

Review of Performance

Quarter 3, 2016 vs Quarter 3, 2015

The Group recorded revenue of RM120.6 million in the current quarter under review compared with RM84.6 million reported in the corresponding period of the preceding year. The increase was principally due to the effect of higher realised average selling prices of CPO and PK and higher sales volumes of CPO and PK during the current interim quarter.

The Group recorded a profit before tax of RM14 million for the current quarter as compared to a profit before tax of RM6.4 million for the corresponding period of the preceding year. The increase was in line with the increase in revenue and also due to the reversal of prior year's impairment loss on deposits paid for acquisition of equity interest in four plantation companies (other non operating income, see Notes A8), partially offsetted by an increase in replanting expenses during the current interim quarter.

The performance of the respective major business segments of the Group are as follows:

Oil Palm Operations

For the current quarter, the oil palm operations segment contributed 99.7% of the Group revenue of RM120.6 million.

The revenue of the oil palm operations increased by RM36.0 million to RM120.3 million in the current quarter compared with RM84.3 million reported in the corresponding period of the preceding year. The increase was principally attributed to the effect of higher realised average selling prices of CPO and PK and higher sales volumes of CPO and PK during the current quarter.

The average selling prices of CPO and PK had increased approximately by 26% and 98.2% respectively, whereas sales volumes of CPO and PK had increased by approximately 5% and 2% the respectively for the current quarter.

The gross profit and profit before tax for the oil palm operations increased by RM6.6 million and RM7.7 million respectively for the current quarter as compared to the corresponding period of the preceding year. The increase was in line with the increase in revenue and also due to the reversal of prior year's impairment loss on deposits paid for acquisition of equity interest in four plantation companies, partially offsetted by an increase in replanting expenses during the current interim quarter.

Nine months ended 30 September 2016 vs Nine months ended 30 September 2015

The Group recorded revenue of RM273 million in the current financial period ended 30 September 2016 compared with RM242.9 million reported in the corresponding period of the preceding year. The increase was principally attributed to the effect of higher realised average selling prices of CPO and PK, partially offsetted by lower sales volumes of CPO and PK during the current financial period.

The Group recorded a profit before tax of RM17.2 million for the current financial period as compared to a profit before tax of RM19.1 million for the corresponding period of the preceding year. The decrease was principally attributed to the effect of increase in replanting expenditure, partially offsetted by increase in revenue and a reversal of prior year's impairment loss on deposits paid for acquisition of equity interest in four plantation companies as other non operating income (see Notes A8) during the current financial period.

In addition, there was a gain on disposal of land of RM5.8 million recognised as other income for management services and rental segment in the corresponding period of the preceding year.

The performance of the respective major business segments of the Group are as follows:

Oil Palm Operations

For the current financial period, the oil palm operations segment contributed 99.7% of the Group revenue of RM273 million.

The revenue of the oil palm operations increased by RM30 million to RM272.1 million in the current financial period compared with RM242.1 million reported in the corresponding period of the preceding year. The increase was principally attributed to the effect of higher realised average selling prices of CPO and PK, partially offsetted by lower sales volumes of CPO and PK during the current financial period.

The average selling prices of CPO and PK had increased approximately by 17.9% and 58% respectively, whereas sales volumes of CPO and PK had decreased by approximately 10.1% and 9.6% respectively for the current financial period.

The gross profit and profit before tax for the oil palm operations increased by RM2.9 million and RM3.2 million, respectively for the current financial period as compared to the corresponding period of the preceding year. The increase was principally attributed to the effect of an increase in revenue and the reversal of prior year's impairment loss on deposits paid for acquisition of equity interest in four plantation companies, partially offsetted by an increase in replanting expenses during the current financial period.

Other segments

Other segments' results for the current quarter and current financial period are insignificant to the Group.

Prospects for the Current Financial Year

The performance of the Group is largely dependent on the production, operation efficiency and prices of CPO and PK.

The Group will continue in its efforts to improve its performance and use its best endeavour to achieve satisfactory results for the remaining period of the current financial year.