Financials

Quarterly Report For The Financial Period Ended 30 June 2024

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Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the 2nd Quarter Ended 30 June 2024

Condensed Consolidated Statement of Financial Position
As at 30 June 2024

Review of performance

Financial review for current quarter and financial year to date

3 Months Ended 30.06.2024 vs 30.06.2023

For the three months ended June 30, 2024, compared to the same period in 2023, the Group's revenue saw a slight decline of 5.2%, dropping from RM122.0 million to RM115.6 million. This decline is attributed to a significant reduction in the sales volume of Crude Palm Oil (CPO) and Palm Kernel (PK), down by 18.8% and 11.5% to 21,981MT and 4,861MT, which contributed to the overall revenue decline. However, there was a 25.9% increase in Fresh Fruit Bunches (FFB) production volume, totaling 73,113MT compared to 58,064MT in the corresponding period of 2023. In contrast, gross profit increased significantly by 16.2%, reaching RM16.9 million from RM14.5 million. The profit before interest and taxation surged by 90.5%, from RM5.6 million to RM10.7 million, while profit before taxation experienced a dramatic rise of 265.6%, moving from RM2.0 million to RM7.4 million. Additionally, the Group reversed a loss to achieve a profit after taxation of RM4.0 million, up from a loss of RM0.4 million, marking a 1,076.9% improvement. The profit attributable to owners also turned around impressively, shifting from a loss of RM0.1 million to a profit of RM4.0 million, representing an improvement of 7,420.0%. EBITDA grew by 22.2%, from RM18.5 million to RM22.7 million.

6 Months Ended 30.06.2024 vs 30.06.2023

For the six months ended June 30, 2024, revenue decreased by 7.9%, from RM226.8 million to RM208.9 million. Despite this, gross profit is increasing by 121.7% from RM9.2 million to RM20.5 million. The loss before interest and taxation reduced substantially by 141.2%, shifting from a loss of RM10.4 million to a profit of RM4.3 million, and the loss before taxation decreased by 87.7%, from RM17.4 million to RM2.1 million. Similarly, both the loss after taxation and the loss attributable to owners are decreasing by 62.2% and 65.0%, respectively. EBITDA for the six months rose by 81.1%, from RM15.4 million to RM27.9 million.

In terms of production and sales volumes, Fresh Fruit Bunches (FFB) production rose by 24.4%, from 103,846MT to 129,719MT. Conversely, Crude Palm Oil (CPO) production decreased by 14.1% from 47,372MT to 40,685MT, while PK production fell by 16.7% from 10,879MT to 9,066MT. Sales volumes followed a similar trend, with CPO sales decreasing by 15.8% from 48,026MT to 40,424MT, and PK sales dropping by 12.2% from 10,714MT to 9,410MT. However, average selling prices for FFB, CPO and PK showed positive trends across all categories. The FFB price increased by 5.7% from RM670 to RM709. The CPO price rose by 2.5% from RM3,806 to RM3,901, and the PK price saw the most significant gains, increasing by 11.9% from RM1,872 to RM2,095.

Commentary on Prospects

The outlook for Malaysia's oil palm industry in the second half of FY2024 and beyond is cautiously optimistic, with production expected to rise due to favorable weather and improved practices, though labor shortages remain a concern. Demand from key markets like India and China, along with efforts to diversify into new markets, should help stabilize prices despite global economic uncertainties. The industry's focus on sustainability through MSPO certification and technological advancements in agriculture will enhance productivity and market access. Navigating environmental regulations and adapting to global economic trends will be crucial for long-term growth and resilience.