IJM Plantations sees FFB production hitting one mil tonne milestone in FY20

KUALA LUMPUR (Aug 27): IJM Plantations Bhd sees higher fresh fruit bunch (FFB) production in the current financial year ending March 31, 2020 (FY20), expecting FFB production to hit one million tonne, which will be a key milestone for the group.

This is slightly higher compared to the group's FFB crop production of 976,000 tonne in FY19 and 933,000 tonne in FY18.

Commenting on crude palm oil (CPO) prices, its chief financial officer and executive director Puru Kumaran is expecting CPO prices to trend slightly higher at around RM2,100 and RM2,200 per tonne this year. This is higher compared to an average CPO price of RM1,998 per tonne for the 12-month period ended March 31, 2019 (FY19).

Despite the recovery in CPO prices, he sees challenges moving forward, with higher cost of production due to hike in minimum wages and foreign exchange movements potentially hurting its profitability.

Hence, Puru is hoping CPO prices will strengthen to RM2,300 per tonne in the next 12 months, citing this will be only enough for the group to stay profitable.

For the financial year ended March 31, 2019 (FY19), IJM Plantations slipped into the red with a net loss of RM36.34 million, versus a net profit of RM27.86 million a year ago, as revenue declined 15.6% to RM630.90 million from RM747.22 million previously.

IJM Plantations' share price settled unchanged at RM1.45 today, bringing it a market capitalisation of RM1.28 billion. The counter has tumbled some 41.53% over the past one year.