KUCHING: Rimbunan Sawit Bhd (RSB) is cautiously optimistic on the outlook of the group in 2024 in anticipation of global growing demand for palm oil and increasing exports by Malaysia.
Company’s managing director Tiong Chiong Ie said the Malaysian oil palm industry is anticipating a stronger performance in 2024 due to factors, such as increased crude palm oil (CPO) production, higher palm oil prices and rising global demand.
“Efforts to address labour issue, allocate funds for replanting programmes and enhance sustainability have been implemented by the government.
Automation, tax incentives, the adoption of DNA testing technology and expanding market scopes aim to boost productivity.
“Despite potential challenges from international regulations and policies, the industry expects improved export performance, especially to major importing countries like China and India.
“The average CPO price is projected to rise in 2024, supported by growing demand and initiatives like B35 in Indonesia promoting biodiesel.
“In view of the above, the group remains optimistic on the outlook for financial year 2024,” he added in the company’s 2023 annual report. RSB group owns 16 oil palm estates, spanning across Kuching, Sibu and Miri regions.
Out of a total landbank of 69,557 hectares, the group’s planted area stood at 43,031 hectares, representing 62 per cent of the landbank.
The bulk of 26,847 hectares of the planted areas are in Miri region,9,396 hectares in Sibu region and 6,761 hectares in Kuching region.
On the age cluster of the oil palms, Tiong said 20,390 hectares are prime mature (8-19 years),18,956 hectares old mature (more than 20 years),2,231 hectares immature (1-3 years) and 1,454 hectares young mature (4-7 years).
In financial year 2023 (FY2023), RSB group reported lower revenue of RM507.8 million (FY2022:RM675.9 million) due mainly to the decrease in the average selling prices of fresh fruit bunches (FFB), CPO and palm kernel by 28.7 per cent, 23.8 per cent and 33.9 per cent respectively, reaching RM661,RM3,725 and RM1,862 per metric tonne respectively.
“Despite a noteworthy18.5 per cent increase in FFB production volume, totalling 250,750 MT compared to 211,681 MT in the corresponding period of 2022, the decline in selling prices attributed to the overall revenue decline,” explained Tiong.
In FY2023, the group posted after-tax profit of RM13 million as compared to after-tax loss of RM5.82 million in FY2022.
Tiong attributed the group’s return to profitability to the aggressive cost control measures and innovative sustainable approaches in operations it had undertaken, as well as the strategic disposal of Jayamax and Selangor oil palm estates in Miri region.
“Additionally, a boost in other income by RM50 million further contributed to the higher profit after tax.
The boost was mainly due to the impairment review triggered by strategic disposal of Selangor and Jayamax estates, resulting to impairment loss no longer required on property, plant and equipment,” he said.
The Selangor and Jayamax estates were sold for RM90 million and RM75 million in cash respectively.
Year-on-year, the group’s total borrowings decreased by RM9.3 million to RM340.1 million from RM349.1 million in 2022 mainly due to the repayment of loans.
In FY2023, RSB group completed a proposed capital reduction via the cancellation of the company’s paid-up share capital which is lost or unrepresented by available assets of about RM223.1 million.
With the capital reduction, the company’s issued share capital is RM391,510,496 comprising 2,041,722,343 shares.
