Ahmad Zaki Resources Bhd said it intends to dispose of its entire 95% stake in its Indonesian plantation unit PT Ichtiar Gusti Pudi Tbk, which operates in Kalimantan.

KUALA LUMPUR (Nov 20): Ahmad Zaki Resources Bhd (AZRB) intends to dispose of its entire 95% stake in its plantation unit PT Ichtiar Gusti Pudi Tbk, which operates in Kalimantan.

“The company will make further announcements relating to the proposed disposal [including any material developments and progress made and seeking shareholders’ approval] as may be appropriate from time to time,” it said in a bourse filing.

AZRB completed the acquisition of a 95% stake in Ichtiar Gusti Pudi for 17 billion Indonesian rupiah (RM5.12 million), or US$1.8 million back in early 2005.

According to AZRB’s annual report, the group has a cultivation land measuring 6,763.89ha with leasehold expiring in 2033 with net book value of RM18.35 million.

Ichtiar Gusti Pudi is AZRB’s main plantation unit, as its 67%-owned Betanaz Mills Sdn Bhd and 40%-owned Peak Crops Sdn Bhd are dormant.

AZRB’s plantation division has been loss-making, adding to the woes of the group which had been in the red for more than four years since the year ended June 30, 2020 (FY2020).

During the pandemic, it was unable to take advantage from the palm oil price boom due to lower-than-anticipated internal production in the absence of skilled harvesters, coupled with the temporary ban of crude palm oil (CPO) exports by Indonesia in 2022.

The plantation segment revenue of RM8.9 million in the financial year ended June 2023 (FY2023) represented 2.29% of the group’s total of RM388.36 million.

On a year-on-year basis, AZRB’s FY2023 plantation segment losses before tax widened to RM111.59 million, from RM48.24 million loss before tax (LBT) in FY2022. Segment revenue fell 95.85% to RM8.9 million, from RM214.4 million.

In FY2021, AZRB’s plantation division booked a LBT of RM45.09 million, on revenue of RM124.3 million.

AZRB is also involved in engineering and construction, oil and gas, property and concessions of the East Klang Valley Expressway and the Sultan Ahmad Shah Medical Centre at the International Islamic University Malaysia.

Shares of AZRB closed unchanged at 18.5 sen on Monday, giving it a market capitalisation of RM118.48 million.