SARAWAK PLANTATION BERHAD
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Annual Report 2014
Message to Our Shareholders
Prospects for 2015 and Beyond
Risk Factors
Economic Environment:
The Malaysian economy
is expected to grow moderately during the coming
year, with growth forecasts of between 4.5% and
5.5%. However, 2015 is expected to be a challenging
year for Malaysia following the fall in global oil
price since end of 2014. Also impact of the new
Goods and Services Tax (from April 2015) on
customer behavior remains to be seen. Nevertheless,
the economy outlook remains positive as Malaysia's
fundamentals are still solid.
CPO Prices:
As a pure plantation concern, our
earnings are not merely sensitive to fluctuations in
CPO prices - they are almost entirely dependent
on them. However the market for edible oils and
feedstock is expected to become slightly more
buoyant in the short term and remain so for the
foreseeable future.
Outlook
The risk factors outlined above show an acceptable
risk profile with valuable opportunities, and thus
the outlook for the short and medium term remains
guardedly positive for a variety of reasons as
outlined below.
Young Oil Palm Age Profile:
Around 45% of our
oil palms are either immature or young mature (less
than 10 years). As these plants attain maturity,
our CPO yields are poised to improve compared to
those of 2014.
Stabilising CPO Prices:
The crude oil price has
fallen to around USD55 to USD60 per barrel and
the current CPO price is around RM2,200 per mt.
Most analysts and industry experts now expect
CPO price ranges between RM2,200 and RM2,400
per mt in 2015.
Given the improved efficiencies achieved in our
operations and our anticipated performance
improvements for 2015, we believe we are able
to deliver acceptable returns to shareholders within
that price range.
Anticipated Results
The Board of Directors is confident of achieving
satisfactory results for 2015, subject to a stable
market for CPO and PK.
Acknowledgements
We would like to convey our sincerest thanks to our
shareholders for their continued support and belief
in SPB. We would also like to thank all the State
and Federal Government Ministries, Departments,
Statutory Bodies and Regulatory Agencies who
have offered us such close cooperation and
support during 2014, along with other relevant
authorities.
Heartfelt thanks are also due to our joint venture
partners, vendors, consultants, professional advisors,
service providers and community neighbours
for their goodwill and unstinting efforts. Last but
not least, I would like to reserve the warmest
thanks to our directors and all the employees of
SPB and its subsidiaries for their hard work and
professionalism.
Thank you,
Datuk Amar Abdul Hamed Bin Sepawi
Chairman
