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Fima Corporation Berhad
(21185-P)
performance
28
PLANTATION
Despite higher revenue on the back of improved CPO and
CPKO prices, the Division registered a deficit of RM0.7 million
due to impairment losses on property, plant and machinery
and biological assets in the Group’s Indonesian subsidiary, PT
Nunukan Jaya Lestari (“PTNJL”) totalling RM29.4 million. Without
the impairment losses, the division’s PBT would be RM28.6
Million an improvement of 34% compared to 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.
Due to the impact of El Nino, fresh fruit bunches (“FFB”) produced
by PTNJL declined 11.8% to 131,484 MT (FYE2015/16:149,060
MT). A lower yield per hectare of 20.6 MT was recorded compared
to 23.2 MT last year. FFB purchased from third parties also
decreased to 51,853 MT from 53,198 MT in the previous year.
CPO and CPKO production during the year under review
was 41,619 MT (FYE2015/16: 45,387 MT) and 3,418 MT
(FYE2015/16: 3,363 MT) respectively. The Group’s average oil
extraction rate of 22.7% was marginally higher compared with
22.4% recorded in the previous year.
Average CPO Price Realised
2,625
2017 2016 2015 2014 2013
2,064 2,207
2,068 2,155
BUSINESS OPERATION REVIEW
The Group’s Plantation Division recorded a revenue of RM133.2
million for the year ended 31 March 2017, an improvement of
29.8% from RM102.6 million recorded in the previous year as
a result of higher average selling prices for CPO. The Division
achieved a CIF average selling price for CPO of RM2,625 per
metric tonne (“MT”) compared to RM2,064 per MT last year.
The rebound of CPO prices during the year was a consequence of
the effects of the prolonged El Nino phenomenon which caused a
longer than anticipated drought thereby resulting in a significant
decline in FFB production and palm oil stocks.
MANAGEMENT DISCUSSION AND ANALYSIS