For FY2012, the Group’s operating profit of RM2.4
billion was 16% lower than the previous year with
reductions reported in all main business segments
with the exception of our plantation division.
The plantation segment reported a 4% increase in
operating profit to RM1,638.5 million for FY2012.
The higher profit reported was due mainly to higher
average CPO price realised of RM3,135/MT as
compared to FY2011 average CPO price realised of
RM2,945/MT. In addition, the better operating
performance from our associate, Bumitama Agri Ltd
(“BAL”), had also contributed to the plantation
segment’s operating results.
Overall, the property division registered a decline in
operating profit for FY2012 at RM704.0 million against
RM770.1 million for the year. After excluding non-operating
gains and losses such as investment
properties revaluation gain of RM165.0 million for
FY2012 and RM93.1 million for FY2011 respectively
and gain on disposal from disposal of investment
properties for FY2011 amounting to RM62.7 million,
the underlying operating profit eased by about 12%
to RM538.3 million due to lower contributions from
our Malaysia and Singapore property development.
However, the property division achieved higher
average sales value per unit as progress was made on
marketing higher value properties although there
was a decline in the total number of units sold during
the year. On the whole, our performance is still
considered satisfactory compared to the industry.
|Segmental Contribution To Operating Profit
The resource-based manufacturing division reported a profit of
RM287.1 million for FY2012, 36% lower than the profit of RM446.0
million reported for FY2011. The division has reported a RM88.2
million loss on changes in fair value of derivative contracts for
FY2012 whilst there was a fair value gain of RM6.4 million for
FY2011. After excluding these fair value differences, the resourcebased
manufacturing division’s profit reported a decline of RM64.3
million or 15% to RM375.3 million which is due to weaker
performance from the refinery and specialty fats sub-segments,
but partially offset by better performance from the oleochemical
sub-segment. The weaker results were mainly attributed to stiff
competition posed by the Indonesian resource-based manufacturers
which have a cost advantage due to Indonesia’s preferential
export duty tariff structure. Despite the shortcoming on the
results, it is still considered satisfactory given the challenging
environment the Group has to operate in.
The Group’s pre-tax profit of RM2,379.0 million was 17% lower
than the results achieved in the previous year whilst net earnings
declined by 20% to RM1,789.4 million. Apart from the effects from
the aforementioned, the decline was also caused by translation
loss on its foreign-currency denominated borrowings amounting
to RM327.1 million as opposed to a translation gain of RM215.4
million from the previous year. The translation loss is however
partially mitigated by a gain of RM124.5 million due to dilution of
interest in our associate company, BAL, as a result of BAL’s listing
exercise on the Singapore Stock Exchange (“SGX”). After excluding
the translation gain and loss on foreign-currency denominated
borrowings, gain from changes in interest in BAL, and other
one-off items from both financial years, the normalised pre-tax
profit for the Group would be 2% lower and the net profit would
be similar to the previous year.
A more detailed review of the Group’s performance is covered
under the section on “Management’s Discussion and Analysis” in the Annual Report.