United Plantations Earnings Hit by Low CPO, Palm Kernel Production

PETALING JAYA: United Plantations Bhd posted 18.1% lower net profit to RM65.01mil in the second quarter ended June 30 on lower crude palm oil (CPO) and palm kernel (PK) production, and low margins of its refinery divisions. Its revenue declined 23.9% to RM187.75mil against RM246.62mil while earnings per share was at 31.24 sen versus 38.15 previously. For the first half year, its net profit fell 18.6% to RM120.81mil from RM148.36mil a year earlier. Revenue dropped 16.5% to RM395.09mil compared with RM473.06mil in the same period previously. In a filing with Bursa Malaysia, the company said there was an 8% drop in CPO and PK production and lower selling prices of CPO and PK by 7.8% and 43.9% respectively for the second quarter compared with the corresponding period in 2008. It said the lower profit was also due to the depressed margins of all divisions of the refinery as a result of the global recession which had affected the demand for its products. The counter remained unchanged at RM13.28 since Aug 19. “The current global economic slowdown will affect world demand for commodities and thus lower CPO and PK prices are anticipated compared with the record prices achieved in 2008.” However, current tight supplies in soyabean and palm oil had contributed to the recent price rally in the vegetable oil complex as had talk of an impending El Nino. Source : The Star

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