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IJM Plantations posts improved 3Q

KUALA LUMPUR: IJM Plantations Bhd posted a third-quarter (3Q) net profit of RM20.06 million, in contrast to a net loss of RM1.99 million for the year-ago quarter, thanks to higher sales volume, improved commodity prices and foreign exchange gains.

The improved earnings for the three months ended Dec 31, 2019 (3QFY20) came on the back of a 66.5% year-on-year (y-o-y) jump in revenue to RM237.81 million from RM142.87 million, its filing with the stock exchange yesterday showed.

In particular, it noted that overall fresh fruit bunch (FFB) production of its Indonesian operations grew 33.1% due to changes in cropping patterns.

For the cumulative nine months ended Dec 31, 2019, the plantation group posted a net profit of RM12.96 million, compared to a net loss of RM49.86 million a year ago, as revenue climbed 16.7% to RM543.74 million from RM466.1 million.

The group said the cumulative revenue was higher y-o-y due to higher sales volume. “FFB production was higher than that in the [corresponding nine-month] period of FY19 due to peak crop cycles of both the Malaysian and Indonesian operations. Despite fair value losses on crude palm oil pricing swap contracts, the impact of higher FFB production, coupled with the strengthening of the rupiah against the US dollar and the yen, resulted in a significant improvement in the overall financial performance of the group,” it said.

On prospects, the group forecast that its crop production in 4QFY20 will decline as cropping patterns move to the normal trough.

“Notwithstanding the group continuing to face cost pressures arising mainly from wage increases, the continuation of prevailing commodity prices and foreign exchange rates, particularly that of the rupiah against the US dollar and the yen, is expected to contribute to an improved performance for the financial year,” it opined.

IJM Plantations shares closed 0.56% or a sen lower at RM1.77 yesterday, giving it a market capitalisation of RM1.56 billion. It saw 24,400 shares traded.