Rimbunan Sawit slips into the red in 1Q on lower gross profit margin

by **Cals** Fri 29 May 2015, 00:25

Rimbunan Sawit slips into the red in 1Q on lower gross profit margin

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By Joshua Lim / theedgemarkets.com | May 28, 2015 : 7:47 PM MYT

KUALA LUMPUR (May 28): [size=14]Rimbunan Sawit Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) slipped into the red in the first quarter ended March 31, 2015 (1QFY15), with a net loss of RM12.35 million or 0.6 sen a share compared with a net profit of RM2.2 million or 0.11 sen a share a year ago, on lower gross profit margin which fell to a loss of 22.6% from a gross profit margin of 23.2% in 1QFY14.

The group said the weakened gross profit margin was mainly due to lower production efficiency and volume which lead to the higher unit cost, and lower selling price for the quarter under review.

Revenue fell 42.5% to RM34.03 million from RM59.15 million in 1QFY14, mainly due to the lower sales volume for crude palm oil (CPO), palm kernel (PK) and fresh fruit bunches (FFB) and as well unfavorable selling price.

In a filing with Bursa Malaysia today, Rimbunan Sawit said sales volume of CPO and PK decreased by 32.3% and 25.7% respectively for 1QFY15 compared with the year-ago period.

"The drop in sales volume was mainly attributable to the lower FFB processed," it said. FFB production decreased by 30.1% year-on-year in 1QFY15, due to the lack of harvesters and flood in the estates.

Average selling prices of CPO and PK also fell 8.1% and 13.7% respectively for 1QFY15 due to the lower global market prices for oil palm products.

Going forward, Rimbunan Sawit said its future performance is "strongly dependent" on the development in the world edible oil and related markets, world economic movement, the green lobby groups’ movements on sustainable palm oil and their corresponding effect on CPO prices.

"Notwithstanding the volatility of the commodity prices, the rising prices of crude oil and soybean oil has made the CPO price achieve slight recovery, which is lingering at around RM2,200 per tonne," it said.

The group is hopeful for better production tonnes as it recovers from the monsoon flood which hit the peninsula and Sarawak.

"Apart from that, the Indonesian Government is planning to enforce its levies on exports of CPO and processed palm oil. This will further enhance the demand for Malaysian’s crude palm oil," it said.

Rimbunan Sawit shares closed unchanged at 55.5 sen per share today, giving it a market capitalisation of RM794.35 million.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
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