Monday, November 21, 2011

United Plantations 3Q net profit up 32.6% to RM105.15m

KUALA LUMPUR (Nov 21): United PLANTATION []s Bhd net profit for the third quarter ended Sept 30, 2011 jumped 32.6% to RM105.15 million from RM79.27 million a year earlier, driven mainly by significant improvement in the selling prices of crude palm oil (CPO) and palm kernel (PK).

The company said on Monday that its revenue for the quarter surged 59.3% to RM439 million from RM275.54 million in 2010.

Earnings per share was 50.52 sen compared to 38.08 sen a year earlier, while net assets per share was RM9.55.

The company declared an interim dividend of 18.75 sen net per share for the year ending Dec 31, 2011, and a special dividend 11.25 sen net per share, to be paid on Dec 21.

For the nine months ended Sept 30, United Plantations' net profit increased 64.9% to RM300.83 million from RM182.43 million in 2010, on the back of a 60% jump in revenue to RM1.11 billion from RM692.27 million.

Reviewing its performance, United Plantations said among the factors that drove its earnings were rising production from newly matured fields from its estates in Indonesia for the current period as compared to the corresponding period in 2010.

It said the production from its estates in Malaysia for the current period was at about the same level as the corresponding period in 2010.

United Plantations said there was also RM 16.44 million unrealised foreign exchange gain from Indonesian rupiah (IDR)-denominated loans to Indonesian subsidiaries in the current period due to the stronger IDR, as compared to RM 13.82 million loss in the corresponding period in 2010.

The company said its refinery recorded a profit before tax of RM 8.7 million in the current period compared with RM 12.9 million in the corresponding period in 2010, adding that the 32.6% decrease was mainly due to losses from fair valuation of foreign exchange positions.

Meanwhile, United Plantations said the higher government windfall gain tax of RM 14.60 million incurred in the current period as a result of higher CPO prices compared with RM 1.43 million in the corresponding period in 2010.

On its prospects, the company said palm oil production in Malaysia and Indonesia was expected to decline seasonally from November 2011 to March 2012, and that the current above average rainfall would affect palm oil production for November 2011.

'These two factors will support prices in the near future,' it said.

However, the company said that the spreading debt problems in the European Union were affecting global economies and are likely to dampen demand in the medium term.

These problems will have a bearish impact on the vegetable oil complex in the longer term if not resolved, as demand for vegetable oils will slow down with lower GDP growth, it said.

United Plantations said it was replanting 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 had been progressively maturing in 2011.

'The Indonesian production will more than compensate 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.

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

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