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performance
Annual Report 2017
29
On the back of lower FFB production, FFB processed reduced to
183,328 MT from 202,406 MT the previous year, a decrease of
9.4%. As a result, the cost of FFB increased by 39% to RM359.6
per MT, while the processing costs rose from RM27.2 per MT to
RM34.9 MT.
ESTATE DEVELOPMENT
During FYE2016/17, the Division spent RM12.1 million on CAPEX,
largely towards plantation development works and construction/
refurbishment of workers’ quarters.
PTNJL
As highlighted earlier by the Chairman in his Statement, PTNJL
is allowed to continue to operate its plantation operations until
the final determination of the status of its land by the Indonesian
2017
2016
Oil Extraction Rate (OER %) Performance Y-o-Y
22.7
22.4
1,100.8
6,379.8
Planted Area (Ha)
Malaysia
Indonesia
courts. PTNJL’s planted area affected by the Ministerial Order
measures approximately 3,691.9 hectares. It is pleasing to
note that to-date, there has not been any disruption to PTNJL’s
operations and therefore there has not been any immediate
operational or financial impact on PTNJL.
Ladang Cendana, Kemaman, Terengganu
The planting program at Ladang Cendana has been completed,
and harvesting of the first planting had commenced in April 2017.
As at 31 March 2017, approximately 760.1 hectares have been
planted.
Ladang Dabong, Kuala Krai, Kelantan
A total of 110.0 hectares has been planted in FYE2016/17.
Planting on the remaining areas have been planned for this
current year.
Ladang Aring, Gua Musang, Kelantan
Progress continues on the new area with 230.7 hectares planted
during the year. Planting on the remaining areas has been planned
for this current financial year.
Ladang Sg Siput, Perak
The progress in obtaining the land development approvals have
been slow and are still pending to-date. Barring any further
delays, we expect to receive the said approvals by the end of this
current financial year
OUTLOOK
The commodity prices remain unpredictable on an expected
recovery in palm and soybean production, slow-down growth in
major markets like China as well as the effects of severe weather
patterns.
Nevertheless, and notwithstanding the final outcome of our appeal
and other actions available to us to annual the Ministerial Order,
the Board is of the view that this sector will continue to benefit
from the growing demand given that palm oil is a significant and
versatile raw material for both food and non-food industries, and
expect to see sustainable growth over the long-term.
In the medium term, we forecast an upward trend in FFB
production as more young areas in the Group’s greenfield estates
attain maturity and start to produce. Subject to palm-oil prices
remaining at healthy levels, growth in the Group’s FFB production
is expected to have a favourable impact on the Group’s revenue
in the coming years.
MANAGEMENT DISCUSSION AND ANALYSIS