Monday, August 22, 2011

Higher selling prices boost United Plantations' 2Q net profit

KUALA LUMPUR: United PLANTATION []s Bhd net profit for the second quarter ended June 30, 2011 doubled to RM109.59 million from RM54.26 million a year earlier, due mainly to higher production and increase in selling prices.

It said on Monday, Aug 22 that revenue for the quarter rose to RM390.63 million from RM233.53 million in 2010.

Earnings per share was 52.65 sen, while earnings per share was RM9.04.

For the six months ended June 30, United Plantations' net profit surged to RM195.68 million from RM103.16 million in 2010, on the back of revenue RM669.01 million.

Reviewing its performance, the company said its profit rose from higher production of crude palm oil (CPO) and palm kernel (PK) by 9.8% and 8.7% respectively in the group's estates in Malaysia and also rising production from newly mature fields from the group's estates in Indonesia.

It also said its refinery recorded a profit before tax of RM 12.7 million in the current period compared with RM 9.3 million in the corresponding period in 2010, due to better margins and positive currency and commodities hedging positions.

On its prospects, the company said palm oil production in Malaysia and Indonesia was expected to recover in 2011 based on the recovery in the biological yield cycle after a pronounced set back in 2010.

Soybean production in South America was expected to reach record levels owing to favourable weather conditions, it said.

'The debt problems in the European Union and United States are affecting global economies and are likely to dampen demand.

'These factors have a bearish impact on the vegetable oil complex, as already seen in the prices of vegetable oils which have adjusted significantly from the highs enjoyed during the later part of 2010 and the early 2011,' it said.

United Plantations said it plans to replant a large area in Malaysia in 2011 in accordance with its replanting policy, adding that some areas in its Indonesian operations came into maturity in 2010 and more areas would be maturing in 2011.

The Indonesian production will compensate somewhat for the crop loss from the replanted areas in Malaysia and, as such, the total production for the Group for 2011 is expected to be above that in 2010, it said.

'The directors are of the opinion that the group's results for the current financial year ending Dec 31,r 2011 should be better than last year primarily due to better selling prices,' it said.


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