PETALING JAYA: CepatWawasan Group Bhd expects crude palm oil (CPO) prices to hover above RM3,000 for the rest of 2021, and does not see its financial performance this year to be significantly affected by the Covid-19 pandemic.
In a filing with Bursa Malaysia, the group, which owns and operates 10,280ha of oil palm plantations in Sabah, based on its website, noted that since hitting a 13-year high of close to RM5,000 per tonne in May 2021, CPO prices had retracted since then but rebounded to the current level of above RM4,000 per tonne.
Cepatwawasan also noted that lockdowns and the ensuing foreign workers’ recruitment restrictions are causing severe labour shortages in the oil palm industry and had also adversely affected the performance of its power segment due to late delivery of essential spare parts and provision of engineering support services during the movement control order (MCO) period.
For its second quarter ended June 30, 2021, Cepatwawasan’s net profit nearly doubled to RM9.5mil while revenue was 45% higher year-on-year (y-o-y) to RM81.4mil mainly due to higher average selling price of CPO by 83% and higher average selling prices of PK (palm kernels), FFB (fresh fruit bunches) and EFB (empty fruit bunches) oil by about two-fold.
However, the group noted that production of CPO, PK, FFB and EFB oil were however lower by 18%, 22%, 5% and 31% respectively.
On a quarter-on-quarter basis, net profit was 69% higher while revenue increased 61%. For the half year under review (H1FY21), net profit jumped 272% y-o-y to RM15.1mil while revenue was 26% higher to RM132mil.
Cepatwawasan has three business segments, namely plantation (cultivation of oil palm), oil mill (milling and sales of oil palm products) and power plant (power generation and sales of biomass by-products).
For H1FY21, its plantation segment’s y-o-y profit jumped from RM1.4mil to RM15.65mil mainly due to an increase in average FFB selling prices by 76%, although FFB production was lower by 8%.
The oil mill segment’s y-o-y profit in H1FY21 dropped 90% to RM370,000 (from RM3.88mil a year ago), mainly due to poorer FFB production in the Sandakan region and also a decrease in average mill OER (oil extraction rate) by 0.22%.
As a result, FFB processed by the mill decreased by 27% and the processing margin was also squeezed due to stiff competition for FFB.
For H1FY21, its power plant segment saw y-o-y profit increased from RM1.47mil to RM6.24mil.
Cepatwawasan said the increase in the average EFB oil selling price by 80% had outweighted the negative impact from a 15% reduction in power export to Sabah Electricity Sdn Bhd or SESB mainly due to the shutdown maintenance of the biomass plant and a delay caused by the MCO border controls.