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Quarterly Report For The Financial Period Ended 31 December 2016

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INTERIM REPORT FOR THE 4TH QUARTER ENDED 31 DECEMBER 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 4, 2016 vs Quarter 4, 2015

The Group recorded revenue of RM111 million in the current quarter under review compared with RM91.3 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, partially offsetted by lower sales volumes of CPO and PK during the current interim quarter.

The Group recorded a profit before tax of RM8.5 million for the current quarter as compared to a profit before tax of RM3.4 million for the corresponding period of the preceding year. The increase was in line with the increase in revenue, partially offsetted by impairment loss of RM7.1 million recognised 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 RM111 million.

The revenue of the oil palm operations increased by RM19.7 million to RM110.6 million in the current quarter compared with RM90.9 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 quarter.

The average selling prices of CPO and PK had increased approximately by 35.7% and 80.2% respectively, whereas sales volumes of CPO and PK had decreased by approximately 16.5% and 19.3% the respectively for the current quarter.

The gross profit and profit before tax for the oil palm operations increased by RM11.6 million and RM5.4 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, partially offsetted by impairment loss of RM7.1 million recognised during the current interim quarter.

Twelve months ended 31 December 2016 vs Twelve months ended 31 December 2015

The Group recorded revenue of RM384 million in the current financial year ended 31 December 2016 compared with RM334.2 million reported in 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 year.

The Group recorded a profit before tax of RM25.7 million for the current financial year as compared to a profit before tax of RM22.5 million for the preceding year. The increase was principally attributed to the effect of 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, partially offsetted by an increase in replanting expenditure and impairment loss of RM7.1 million recognised during the current financial year.

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 preceding year.

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

Oil Palm Operations

For the current financial year, the oil palm operations segment contributed 99.7% of the Group revenue of RM384 million.

The revenue of the oil palm operations increased by RM30 million to RM382.7 million in the current financial year compared with RM333 million reported in 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 year.

The average selling prices of CPO and PK had increased approximately by 22.4% and 63.8% respectively, whereas sales volumes of CPO and PK had decreased by approximately 11.9% and 12.3% respectively for the current financial year.

The gross profit and profit before tax for the oil palm operations increased by RM14.6 million and RM8.6 million, respectively for the current financial year as compared to 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 and impairment loss of RM7.1 million recognised during the current financial year.

Other segments

Other segments' results for the current quarter and current financial year 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 next financial year.