Lower CPO prices drags Boustead 1Q earnings, net profit falls 69%

Business & Markets 2013
Written by Surin Murugiah of theedgemalaysia.com
Wednesday, 22 May 2013 13:17
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KUALA LUMPUR (May 22): BOUSTEAD HOLDINGS BHD [] net profit
for the first quarter ended March 31, 2013 fell 69.08% to RM99.9
million from RM144. 6 million, due mainly to lower crude palm oil (CPO)
prices which impacted its PLANTATION [] division.
The company said on Wednesday that its revenue for the quarter rose
to RM2.53 million from RM2.36 billion.
Earnings per share fell to 9.66 sen from 13.98 sen a yar earlier, while
net assets per share was RM4.53.
Reviewing its performance, Boustead said the plantation division was
severely impacted by depressed commodity prices and a decline in crop
production for the period under review.
“The average palm oil price was RM2,335 per MT, representing a
decline of 26% compared with last year’s corresponding period’s
average of RM3,164 per MT,” it said.
On its prospects, Boustead said the outlook for CPO will be challenging,
as weaker demand due to slower global economic growth could
dampen CPO prices in 2013, although supply constraints that may be
brought on by erratic weather patterns and a moderation of economic
woes would hopefully mitigate the downward pressures on CPO prices.
“The prospects for the Malaysian pharmaceutical industry remain
reasonably bright. The Ministry Of Health concession business will be
the main growth driver to boost the Pharmaceutical Division's earnings.
“The Trading & Industrial Division's earnings will be driven by Boustead
Petroleum Marketing which is expected to produce satisfactory results
on the back of its BHPetrol operations,” it said.