KUALA LUMPUR (Feb 18): Sarawak Plantation Bhd saw its net profit fall 87.7% to RM2.88 million or 1.03 sen for the fourth quarter ended Dec 31, 2015 (4QFY15) from RM23.39 million or 8.37 sen a year ago, mainly due to a reversal of impairment loss in FY14.
In its quarterly report to Bursa Malaysia today, the oil palm plantation group explained that the reversal of impairment loss was on deposits paid for acquisition of equity interest in four plantation companies amounting to RM28.5 million.
The amount was recognised as other non-operating income in 4QFY14.
Apart from that, Sarawak Plantation said the weaker profitability was also due to the effect of lower sales volumes and average selling price of crude palm oil (CPO).
Although the negative elements were partially offset by higher average selling prices of palm kernel (PK), the group noted that sales volume for this product was also lower.
For 4QFY15, Sarawak Plantation registered a revenue of RM91.31 million, which was 6.08% lower from RM97.22 million reported in 4QFY14.
"The sales volumes of CPO and PK had decreased by approximately 7.9% and 10.9% respectively. The realised average selling prices of CPO had decreased by approximately 1.3%, whereas the average selling prices of PK had increased approximately by 19.7% for the current quarter," the group said.
The group also declared an interim dividend of 4.5 sen per share for FY15, payable on March 30.
For full-year FY15, Sarawak Plantation's net profit fell 65.3% to RM21.3 million or 7.62 sen per share from RM61.29 million or 21.92 sen in FY14, while revenue dropped 14.3% to RM334.23 million from RM389.9 million a year earlier.
Moving forward, Sarawak Plantation said its performance is largely dependent on the production, operation efficiency and prices of CPO and PK.
"The year 2016 is a challenging year in the light of anticipated slowing down of global economy and low commodity prices. Nevertheless, the group will continue to carry out mitigating measures such as productivity improvement and cost containment and will endeavour to achieve satisfactory results for the next financial year, subject to an improved market for global oils and fats," it added.
Sarawak Plantation shares fell two sen or 1.05% to close at RM1.88 today, giving it a market capitalisation of RM525.58 million.
http://www.theedgemarkets.com/my/article/sarawak-plantations-4q-earnings-down-88-impairment-loss-reversal-pays-45-sen-dividend
