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Annual Report 2017
39
The
Group’s
Plantation
Division
recorded a revenue of RM146.87 million
for the year ended 31 March 2017, an
improvement of 30.4% from RM112.63
million recorded in the previous year as
a result of higher average selling prices
for CPO and CPKO. This was achieved
despite the decline in fresh fruit bunch
(“FFB”) production to 149,753 metric
tonne (“MT”) compared to the 164,738MT
harvested last year with an average yield
of 19.41MT per mature hectare (FYE2016:
21.26MT). The average price for CPO
(CIF, net of duty) registered during the
year was RM2,625 per MT compared to
RM2,064 per MT last year.
The rebound in CPO prices during the
year was a consequence of the lingering
effects of the El Nino weather pattern
which had caused dry weather thereby
resulting in a significant overall decline
in FFB production and palm oil stocks
which in turn pushed up palm oil prices.
Despite higher revenue on the back of
improved CPO and CPKO prices coupled
with lower cost of sales during the year,
the Division’s PBT registered a deficit
of RM5.96 million due to impairment
losses on property, plant and equipment
and biological assets in the Group’s
Indonesian subsidiary, PT Nunukan
Jaya Lestari (“PTNJL”) totaling RM29.37
million. Without the impairment losses the
division’s PBT would be RM23.42 million,
an improvement of 58.5% over last year.
As mentioned earlier in the Chairman’s
Statement, PTNJL has instituted legal
proceedings to challenge the revocation
of PTNJL’s land title under the Ministerial
Order issued by the Menteri Agraria dan
Tata Ruang/Kepala Badan Pertanahan
Nasional Republik Indonesia (“Ministerial
Order”). As a consequence, and although
the outcome of the appeal is pending,
PTNJL had decided to recognise the
impairment losses of the assets affected
by the State Administrative Court’s
decision on 13 June 2017 as the matter
indicates a material uncertainty that may
cast an adverse effect on the manner in
which the assets is expected to be used.
FFB
produced
by
PTNJL
fell
11.8%
to
131,484MT
(FYE2016: 149,060MT). A lower yield
per hectare of 20.6MT was recorded
compared to 23.2MT last year. FFB
purchased from third parties also
decreased to 51,853MT from 53,198MT
in the previous year. It is pleasing
to note that in Peninsular Malaysia,
FFB production of our Johor estates
have improved markedly by 11.7% to
17,194.49MT (FYE2016: 15,396.21MT) due
to better yield per mature hectare of
20.38MT against the 18.31MT achieved
last year.
CPO and CPKO production during
the year under review was 41,619MT
(FYE2016: 45,387MT) and 3,418MT
(FYE2016: 3,363MT) respectively. The
Group’s average oil extraction rate
(“OER”) of 22.7% was slightly higher
compared to the 22.4% OER recorded in
the previous year.
On the back of lower FFB production,
the volume of FFB processed declined
9.4% to 183,328MT from 202,406MT
in the previous year. The cost of FFB
production averaged RM337.7 per MT
while processing costs increased from
RM27.2 per MT to RM34.9 per MT in line
with the lower FFB processed.
PLANTATION
DIVISION
Contributing
26.8%
of total
group Revenue
- RM
5.96
million
division pbt