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IJM Plantations’ 3Q net profit up three times amid higher commodity prices, better forex rates and lower fair value losses

KUALA LUMPUR (Feb 25): IJM Plantations Bhd saw its net profit increase by three times to RM66.59 million or earnings per share of 7.56 sen per share (EPS) in the third quarter ended Dec 31, 2020 (3QFY21) from RM20.06 million or EPS of 2.28 sen a year ago on higher commodity prices.

In a filing with Bursa Malaysia, the company also attributed the better earnings to the favourable currency fluctuations as the Indonesian rupiah strengthened against both the US dollar and Japanese yen, resulting in net foreign exchange gains of RM29.52 million.

Meanwhile, a lower fair value loss recorded on the crude palm oil pricing swap contracts of RM8.21 million versus RM11.32 million a year ago also lifted earnings in the current quarter.

Benefiting from higher commodity prices, the company’s revenue for the quarter rose 14.36% to RM271.96 million from RM237.81 million a year before.

The increase in revenue, however was capped by lower sales and production of fresh fruits bunches (FFB) due to the effects of adverse weather conditions as well as revision of the crude palm oil (CPO) export levy and export tax by the Indonesian authorities which came into effect from Dec 10, 2020, resulting in reduced revenue of RM7.5 million for December.

On a quarter-on-quarter basis, IJM Plantations returned to the black from a net loss of RM1.04 million in 2QFY21 on higher commodity prices, improved FFB production and favourable currency fluctuation on foreign currency borrowings.

Its revenue also improved 28.6% from RM211.37 million.

For the cumulative nine months ended Dec 31, 2020 (9MFY21), its cumulative net profit improved significantly to RM147.67 million from RM12.96 million a year ago, while revenue rose 26.77% to RM689.31 million from RM543.74 million.

IJM Plantations closed up one sen or 0.56% to RM1.81, bringing it a market capitalisation of RM1.59 billion. There were 155,400 shares traded. Since its March low of RM1.03, the stock has appreciated 76%.