Financials

Quarterly Report For The Financial Period Ended 31 December 2023

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the 4th Quarter Ended 31 December 2023

Condensed Consolidated Statement of Financial Position
As at 31 December 2023

Review of performance

Financial review for current quarter and financial year to date

3 Months Ended 31.12.2023 vs 31.12.2022

As of December 31, 2023, the Group reported a revenue of RM139.6 million, marking a decrease from RM154.1 million on December 31, 2022. This decline is attributed to a significant reduction in the average selling prices of Fresh Fruit Bunches (FFB), Crude Palm Oil (CPO), and Palm Kernel (PK) by 36.3%, 28.5%, and 46.6%, respectively. Additionally, the decrease in CPO and PK sale volumes, down by 7.6% and 7.5% to 30,408MT and 6,537MT, contributed to the overall revenue decline. Notably, there was a 16.7% increase in FFB production volume, totaling 72,450MT compared to 62,101MT in the corresponding period of 2022.

Despite facing a gross loss of RM10.5 million, the Group demonstrated improved financial performance, achieving a profit before tax of RM26.9 million, profit after tax of RM28.6 million, and EBITDA of RM60.6 million. This positive trend can be primarily attributed to aggressive cost control measures, innovative sustainable approaches in operations, and the strategic disposal of Jayamax and Selangor estates, leading to the reversal of impairment losses for the year ending 2023.

12 Months Ended 31.12.2023 vs 31.12.2022

As of December 31, 2023, the Group reported a revenue of RM507.8 million, marking a decline from RM675.9 million on December 31, 2022. This downturn is primarily attributed to a decrease in the average selling prices of Fresh Fruit Bunches (FFB), Crude Palm Oil (CPO), and Palm Kernel (PK) by 28.7%, 23.8%, and 33.9%, respectively, reaching RM661, RM3,725, and RM1,862. Despite a noteworthy 18.5% increase in FFB production volume, totaling 250,750MT compared to 211,681MT in the corresponding period of 2022, the decline in selling prices contributed to the overall revenue decline.

The Group reported a gross profit of RM19.1 million, profit before tax of RM17.6 million, profit after tax of RM12.4 million, and EBITDA of RM100.7 million. This mainly due to the Group has undertaken aggressive cost control measures, innovative sustainable approaches in operations, and the strategic disposal of Jayamax and Selangor estates resulted in reduced distribution cost by RM7.9 million, and a cut in administrative expenses by RM2.3 million. Additionally, a boost in other income by RM46.7 million further contributed to the higher profit after tax.

Commentary on Prospects

The Malaysian oil palm industry is optimistic about 2024, anticipating a stronger performance due to factors such as increased crude palm oil (CPO) production, higher palm oil prices, and rising global demand. Efforts to address labor issues, allocate funds for replanting programs, and enhance sustainability have been implemented by the government. Automation tax incentives, the adoption of DNA testing technology, and expanding market scopes aim to boost productivity. Despite potential challenges from international regulations and policies, the industry expects improved export performance, especially to major importing countries like China and India. The average CPO price is projected to rise in 2024, supported by growing demand and initiatives like B35 in Indonesia promoting biodiesel. In view of the above, the Group remains cautiously optimistic on the outlook for the financial year 2024.