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Financials

Quarterly Report For The Financial Period Ended 31 March 2018

Financials Archive

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INTERIM REPORT FOR THE FIRST QUARTER ENDED 31 MARCH 2018

Condensed Consolidated Statement of Financial Position

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

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

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

Review of Performance

Quarter 1, 2018 vs Quarter 1, 2017
Three months ended 31 March 2018 vs Three months ended 31 March 2017

The Group recorded revenue of RM70.9 million in the current financial period ended 31 March 2018 compared with RM109.6 million reported in the corresponding period of the preceding year. The Group's operating loss before tax was RM3.9 million for the current financial period as compared to an operating profit before tax of RM18.3 million for the corresponding period of the preceding year. The decrease in operating results was principally due to the effect of lower realised average selling prices and lower sale volumes of CPO and PK coupled with higher estate costs during the current financial period.

In accordance with MFRS 141, the Group recognised biological assets of RM26.9 million as at 31 March 2018 compared against RM24.7 million as at 31 December 2017, resulted in a gain arising from changes in fair value of the biological assets of RM2.2 million recorded in the current financial period. A loss arising from changes in fair value of biological assets of RM5.0 million was recorded in the corresponding period of the preceding year as a result of lower fair value of biological assets of RM32.2 million as at 31 March 2017 against RM37.2 million as at 31 December 2016.

As a result of the decrease in operating results and fair value changes of biological assets as explained above, the Group recorded a loss before tax of RM1.6 million for the current financial period compared against a profit before tax of RM13.3 million for the corresponding period of the preceding year.

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

Oil Palm Operations

The oil palm operations comprise estate and mill operations. During the current financial period, estate operations recorded a revenue and loss of RM21.6 million and RM1.3 million respectively, whereas mill operations recorded a revenue and profit of RM68.4 million and RM2 million.

For the current financial period, the oil palm operations segment contributed 99.8% of the Group revenue of RM70.9 million.

The revenue of the oil palm operations decreased by RM38.7 million to RM70.7 million in the current financial period compared with RM109.4 million reported in the corresponding period of the preceding year. The decrease was principally attributed to the effect of lower realised average selling prices of CPO and PK and lower sales volumes of CPO and PK.

The average selling prices of CPO and PK had decreased approximately by 21.9% and 30.6% whereas the sales volumes of CPO and PK had decreased by approximately 16.9% and 12.6% respectively for the current financial period.

The operating loss before tax for the oil palm operations was RM3.5 million for the current financial period as compared to operating profit before tax of RM18.5 million for the corresponding period of the preceding year, in line with the decrease in revenue and increase in estate costs.

Other segments

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

Prospects for the Next Financial Year

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

The Group's current focus is on the transformation and reform of the Group's management, strengthening and improving the standard operating procedures with the ultimate goal to achieve a better yield for the current financial year. Emphasis is placed on organisational and operational enhancement to increase productivity and production. Resources are allocated for areas that will immediately impact production and productivity.

Barring any unforeseen circumstances, the Board is confident that with these improvements in place, the Group will achieve better results in the near future.


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