GENTING 
By
KUALA LUMPUR, Aug 28 - Genting Plantations Berhad today reported its financial results for the first half ended 30 June 2013, with pre-tax profit at RM111.7 million, down 42% from the corresponding period of 2012.
Revenue for 1H 2013 increased 12% from the same period a year earlier to reach RM633.8 million, while earnings per share declined 42% year-on-year to 11.39 sen.
The improved revenue is mainly attributed to a 22% increase in crop production as well as robust property sales, which surged during the first six months to match the total achieved for the whole of 2012.
Fresh Fruit Bunches ("FFB") production in 1H 2013 was higher year-on-year, owing to a recovery in yields, especially in Sabah region estates, and the absence of the weather- induced disruptions encountered in the same period of the previous year. Production in Indonesia also continued to grow, with more planted areas progressively maturing and existing mature areas moving into higher yielding brackets.
However, palm oil selling prices remained soft in 1H 2013 amid concerns about high inventories and expectations of rising global oilseed supplies. The Group achieved average crude palm oil and palm kernel prices of RM2,309/mt and RM1,188/mt in 1H 2013 compared with RM3,193/mt and RM1,915/mt respectively in the corresponding period of last year.
As a result of the lower palm product selling prices, which more than offset the higher crop production, along with the impact of contributions in support of the Group's social responsibility efforts, the Plantation-Malaysia segment recorded a year-on-year decline in EBITDA in 1H 2013.
The Plantation-Indonesia segment, meanwhile, posted a maiden EBITDA in 1H 2013 on the back of a higher contribution from the West Kalimantan region and a lower loss from Central Kalimantan as FFB yields and oil extraction rates improved.
For the Property segment, EBITDA increased four-fold in 1H 2013 from the same period a year earlier, boosted by stronger sales amid better demand for properties in Genting Indahpura, particularly for industrial and commercial properties.
The Biotechnology segment continued to step up its research and development activities in
1H 2013.
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The Group's performance in the remainder of 2013 will be significantly influenced by the direction of palm oil prices, crop production trends, demand for the Group's properties and the impact of rising input costs.
Fundamental demand and supply dynamics for global oilseeds and edible oils, weather patterns in crop growing regions, the underlying regulatory environment in major producing and consuming countries and global economic developments are expected to be among the leading drivers of palm oil price direction.
Notwithstanding this, the Group is optimistic that on the production front, output remains on course to surpass the 2012 level given the ongoing growth in Indonesia as additional areas are brought into harvesting and existing mature areas move into higher yielding brackets.
The Property segment will remain focused on developments in Johor, especially in the strategically-located Genting Indahpura project, by tapping on the growing interest in the Iskandar Malaysia region and offering a wide array of properties to meet market requirements.
The Biotechnology segment will continue to enhance its R&D capabilities, both internally and through collaborations with renowned partners, to meet its objectives of developing novel solutions for sustainable agriculture.
The Board of Directors declared an interim dividend of 3.75 sen per ordinary share of 50 sen each, less 25% tax, compared with the interim dividend of 4.25 sen per ordinary share, less
25% tax, declared for the previous year's corresponding period.
A summary of the quarterly results is shown in Table 1.
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TABLE 1:RM' Million | 2Q 2Q 2013 2012 % | 1H 2013 | 1H 2012 | % |
Revenue Plantation - Malaysia Plantation - Indonesia Property Adjusted EBITDA Plantation -Malaysia -Indonesia Property Biotechnology Others Profit before tax Profit for the financial period Basic EPS (sen) | 208.5 260.9 -20 26.4 5.6 >100 55.8 27.5 >100 | 423.1 40.9 169.8 | 504.6 10.3 51.8 | -16 >100 >100 |
Revenue Plantation - Malaysia Plantation - Indonesia Property Adjusted EBITDA Plantation -Malaysia -Indonesia Property Biotechnology Others Profit before tax Profit for the financial period Basic EPS (sen) | 290.7 294.0 -1 | 633.8 | 566.7 | +12 |
Revenue Plantation - Malaysia Plantation - Indonesia Property Adjusted EBITDA Plantation -Malaysia -Indonesia Property Biotechnology Others Profit before tax Profit for the financial period Basic EPS (sen) | 53.1 99.6 -47 2.6 (6.5) - 16.4 4.9 >100 (6.3) (5.1) +24 (4.9) (4.9) - | 98.5 2.6 41.4 (12.1) (6.8) | 213.4 (11.2) 10.8 (9.9) (6.2) | -54 - >100 +22 +10 |
Revenue Plantation - Malaysia Plantation - Indonesia Property Adjusted EBITDA Plantation -Malaysia -Indonesia Property Biotechnology Others Profit before tax Profit for the financial period Basic EPS (sen) | 60.9 88.0 -31 53.3 87.9 -39 40.5 67.4 -40 5.58 9.20 -39 | 123.6 111.7 83.8 11.39 | 196.9 191.9 144.7 19.59 | -37 -42 -42 -42 |
Genting Plantations, a 54.6%-owned subsidiary of Genting Berhad, commenced operations in 1980. It has a landbank of about 66,000 hectares in Malaysia and some 162,700 hectares in Indonesia held through joint ventures. It owns six oil mills in Malaysia and two in Indonesia, with a total milling capacity of 385 tonnes per hour. Genting Plantations is one of the early members of the Roundtable on Sustainable Palm Oil (RSPO).
Genting Plantations has also diversified into property development to unlock the value of its strategically-located landbank and has invested significantly in biotechnology in a major effort to apply genomics to increase crop productivity and sustainability
For more information, visit www.gentingplantations.com
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