KUCHING: Sarawak Oil Palms Bhd (Sarawak Oil Palms) will continue its efficiency and productivity to stay competitive and to realise full potential of its present resources in the midst of volatile palm product prices, global oil competition and movement in prices.
According to group executive chairman Tan Sri Datuk Ling Chiong Ho in its Annual Report 2017, the group would expect stiff challenges arisen from uncertain global economic climate, volatile palm products prices and increasing operating costs.
This comes as Sarawak Oil Palm posted a profit after tax of RM258.6 million for its financial year 2017 against RM142.2 million in year 2016, representing an increase of 82 per cent.
The higher profit achieved was mainly attributed to higher palm oil prices realized and higher fresh fruit bunches (FFB) production.
The weighted average realised prices for palm oil products was higher at RM2,892 per tonne (mt) compared to RM2,689 per mt for year 2016.
“The Group FFB production increased by approximately 36 per cent compared to preceding year’s due to recovery from adverse impact of EI-Nino weather experienced in year 2016, and also contribution from FFB production from the new plantation estates acquired towards the end of year 2016,” he said in his chairman’s statement.
“In tandem with the increase in profit achieved, basic earnings per share for the year improved to 41.84 sen against 28.05 sen for year 2016.”
On the other hand, Ling said during the year, plantation sector in Sarawak — including Sarawak Oil Palms — faced acute labour shortages which badly impacted plantation operations with associated crop losses.
“Continued effort is being pursued by the Group to recruit plantation workers from more countries,” he added. “Besides this, new initiatives are also explored to boost productivities through mechanisation.
“The group continues its dividend policy by retaining a large portion of its available funds to cater for its future funds requirements. Its cash and cash equivalents of RM635 million as at the end of 2017 would be managed in prudent manner for its future expansion, debt management, and maintaining healthy financial and liquidity position.”
In connection there with, the board of directors proposed a first and final tax exempt dividend of 6 sen per ordinary share amounting to RM34.24 million for FY17, which is an increase of one sen compared to year 2016.
This comes as the group strives to have a balanced approach towards people, planet and profit in achieving its corporate visions.
“Towards this, the group is fully committed to undertake sustainable agricultural practices, good corporate governance, high standards of occupational safety, health and welfare of workforce, and exercise due corporate social responsibility to the communities it operates in.
“In order to formulate effective conservation and biodiversity strategies, the group, in collaboration with local and foreign research bodies and universities, has embarked on researches, amongst others, greenhouse gas and carbon pool, and carbon ecosystem and nitrogen dynamics of tropical peat land. These researches are on-going and in-progress.”