GLENEALY Plantations (Malaya) (2372) Bhd said net profit and revenue this year will fall for the first time after three straight years of growth due to lower crude palm oil (CPO) prices.
CPO prices have fallen sharply from its peak of RM4,486 a tonne in March to around RM1,500.
But Miri-based Glenealy, a relatively small player, said it will remain profitable as current prices are still higher than its production cost of RM1,100 to RM1,200 per tonne, managing director Yaw Chee Ming said.
For the 12 months to June 30 2008, its net profit quadrupled to RM95 million, driven by higher CPO prices that averaged RM3,055 per tonne for the year and palm kernel (PK) prices at RM1,781 per tonne.
Revenue was at RM247.4 million compared with RM141 million the year before.
Yaw expects the sales volume of CPO and PK to improve this year as crops are increasing.
Glenealy has 1,259ha of new plantings in Lana, Sarawak, which will be ready for commercial harvesting next month.
Soon, its third oil mill in Lana estate, Sarawak, will commence operation, improving the company's average oil extraction rate, which is at 22.69 per cent currently.
"Last year's performance was record-breaking. Until we have another record-breaking CPO price, we will not be able to beat 2007's record profit. The company's performance will be affected this year," Yaw told Business Times after the company's shareholders meeting in Kuala Lumpur yesterday.
Yaw warned that the industry will continue to face challenges like the continuing fluctuation of CPO prices, oversupply and shortage of foreign labour.
But it has in place a strategy to grow organically, which will include a plan to buy smaller planters and more plantation land in Malaysia and overseas.
Currently, its total palm oil landbank is 65,000ha, spread across Sabah, Sarawak and Kalimantan, Indonesia, where 23,582ha has been planted with palm oil trees, out of which 4,940ha are below three-year-old palms.
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