(extracted from Annual Report 2020)

An extremely challenging yet fruitful year 2020

2020 was a distinctly different year from previous years, not just for us, but for the entire world as a whole.

The COVID-19 pandemic has greatly impacted many individuals and companies over the course of the last year, ours included, and reverberations from it will be felt for years to come. It shaped the landscape of Malaysian and global economies as well as business environment and with that there is much uncertainty in the market. Low crude palm oil (CPO) prices were experienced early of the year, followed by one of its highest peaks recorded in recent years, all within the span of a few months in 2020.

Under such circumstances, our team faced multiple challenges and difficulties in 2020 that we had not encountered before. In spite of that, we are proud to announce that we were able to weather through these difficult times, adapt to the new normal and persevere onwards.

2020 Financial Performance

Despite all the challenging and uncertainties arising from the COVID-19 pandemic, our Group achieved a remarkable growth of 34% in revenue contributed by favourable CPO price coupled with notable growth in fresh fruit bunches (FFB) production. Revenue stood at RM465.7 million for the financial year 2020 compared to RM347.5 million for the financial year 2019.

Correspondingly, the Group's profit before tax increased from RM28.4 million in 2019 to RM83.1 million in 2020 whereas the net profit attributable to owners of the Company grew from RM20.9 million in 2019 to RM61.4 million in 2020. This net profit translated into an earnings per share of 22.01 sen per share for 2020, an impressive growth of 194% compared to 2019 of 7.49 sen per share.

Dividends

Based on these impressive results, we declared two interim dividends of 5 sen per share each, totalling 10 sen per share for financial year 2020. This is the highest in the last five years. The dividends were paid on 6 August 2020 and 21 January 2021 respectively.

We recognise our shareholders' continued support and belief in us, even in these trying times. The dividends paid represent our appreciation to our valued shareholders for their unflagging confidence in the Group.

The Company will continue to have our shareholders' best interests in mind as we move forward.

2020 Operating Performance Review

Our FFB production increased by 22% in 2020. We produced 341,065 metric tonne (mt) of FFB in 2020 compared to 280,649 mt of FFB in 2019. The main contributor to this significant growth is our Central Region estates which recorded a notable increase of 44% in production compared to the previous year, 2019.

Considering all the circumstances in 2020, this growth and achievement is an outstanding feat. The FFB production growth is an important breakthrough in our progress and we are pleased to commemorate yet another milestone in our long journey. We will strive for even greater heights in the coming future.

Sustainability

The Group will continue to evolve and adjust to the competitive and dynamic business environment, while still placing its main priority in increasing FFB production and yield per hectare.

Though we have taken large strides in improving the overall production and efficiency of our operations, we will still persist and keep on developing and enhancing to grow ourselves into a Company to be reckoned with within this industry

We wish to keep pushing ourselves beyond our comfort zone and raising our production levels to match those of the industry standard.

Productivity and yield remain the focus of our operations but we will not neglect the importance of a sustainable future for our Group.

Whilst we recognise that the COVID-19 pandemic is beyond our control, we remain committed to put emphasis on the safety and health of our stakeholders. We have taken every possible precautions and measures to safeguard our work force whilst at the same time minimise disruptions to our business and operations. In this context, E-communications and reporting have emerged as a new trend and an essential way in carrying out our business and operations.

In addition, we remain focused on adopting on going sustainable agricultural practices in conserving and protecting our environment.

These are all factors that we have taken into account before making any decisions in our operations. It is in our best interest that we are able to preserve a balance between all these aspects in the Group.

We are fully supportive of a work atmosphere where knowledge and experience are shared among our staff. We strive to maintain a work atmosphere where employees are able to contribute their ideas and innovations.

We make efforts to create an environment that propagates motivation and productivity, rather than conflict or hostilities among the staff. As we are currently, our team has been phenomenal at fostering this kind of environment at their workplace. Our team has weathered through many storms together, celebrated many landmark times together and have grown strong together, both as a team and a family.

Prospect and Outlook

The outlook for 2021 remains uncertain and hard to predict. Economic recovery and growth are dependent on the successful containment of the COVID-19 pandemic and rollout of vaccination globally and in Malaysia.

Nevertheless, it is believed that the outlook of the oil palm industry in 2021 is positive given the anticipating positive prospect demands.

Barring any unforeseen circumstances, greater milestones will be accomplished in near future and we believe this will cement our place amongst the strong plantation companies in Sarawak.

Appreciation

On behalf of the Board of Directors, I would like to give my sincerest thanks to all our shareholders for putting their belief and trust in the Company and to all our stakeholders, Government and agencies, business partners and community neighbours who have provided us assistance and their collaboration throughout the years.

Words alone cannot express enough our appreciation and gratitude. As a token of appreciation, we have donated RM1 million to the Sarawak State Government to assist in the pandemic relief.

In addition, to all our directors and employees of SPB Group, they have our deepest gratitude for their persistent hard work and determination to excel. It is with their commitment that we are here today. Our journey's path is paved by the hard work and commitment of those who dedicated themselves fully to the Group.

To all these individuals and groups who contributed to our achievements, we cannot describe how grateful we are for your ongoing support and invaluable dedication to Sarawak Plantation Berhad (SPB), especially through these difficult times. We want you to know that you are also part of this success and we are honoured to have you on board.

Datuk Amar Abdul Hamed Bin Sepawi
Executive Chairman