However, based on the increased palm oil prices and the company’s ability to minimize any significant crop losses so far in spite of the acute labour shortages, the Board of Directors expect that the results for the year will be satisfactory and better than in 2021.
United plantation hv plantation(upstream) and refinery (downstream) business, the management did say they expect the refinery loss will revert in the coming quarters. Its good and bad model as during palm oil down time, their refinery will compensate their upstream business and vice versa. Those new investor donno abt this will be surprised n burnt.
"Nevertheless, due to the large inverse in prices between the spot and future month contracts, contribution has been reduced somewhat." This statement is so bo-cheng-co. "reduced somewhat"? I hope it can be more precise and professional.
anywhere UTPLD is the plantation that consistence given dividen just hope dividen can maintain same ok liao 1 year also got 7% ++++ above somemore weakness ringgit havent reflect
Stil it closed + ves 2dy ..either markets or,investors has forgiven . the profits seems t b ok n if, not for cukai makmur of 20 millions incurred ,utd wud been alluring rather than ,dismayed! Looks like a strong cpo futures as a result of export ban wuld come t play tmrw.!
I am very sorry to say that UP's Management is real hopeless ! They continue to make huge losses on hedging the wrong side for the last 2 years. This has resulted huge amount of good money wasted and shareholders missed the opportunity to reap the benefit of the 200% surge in CPO price. (1) The realised CPO price for Q1 2022 is only $3,798 as compared to average spot price of $6,050 ! That is massive difference of $2,252/mt CPO ($6,050 - 3,798) !! The opportunity loss in NPBT = $2,252 X 57,865 mt CPO produced = $130.3 mil . After considering windfall tax and corporate tax , the opportunity loss in NPAT is about $84 mil or 20sen/share.
(2) as at 31/3/2022, the company suffers loss on outstanding hedges amounting to a massive $222 mil . About $150 mil of the hedging loss is has been accounted for in Q1 2022. This $150 mil hedging loss is equivalent to about 27sen /share of nett profit loss.
Without (1) and (2) above, the company should report EPS to the tune of 61.4 sen ( 14.4 +20+27). Shareholders should take the management to task !
The plantation companies that sell their produce on spot month basis won't have the problem of UP. These plantations are Taann, SWKplant, Hsplant, Bplant, THplant, MHC, Cepat and even SOP who have reverted to spot selling since 2nd Q 2021. These plantations will reap the highest benefit from >200% surge of CPO price.
UP and SIMEPLT have almost similar hedging loss amount despite SIMEPLT being many times bigger. UP have balance of RM225m unrealised losses as of 31/03/22, SIMEPLT around RM215m as of 31/12/21.
No surprise about this major loss, however I wonder who is sittting in the other end of those hedging contracts. Many oil and gas companies have stopped forward selling long time ago, only the ones with high debt ratio have to.
Hedging policy only work during CPO price downward but when asking to stop the policy during AGM, board insisted to continue with the policy. This Q already suffer loss of 90mil from hedging and cash from operation loss 251mil mean no advantage of higher CPO for tis Q. All major Planter (Simeplt, KLK, IOI and Genp) did similar hedging in various position. In sum, SOP, TAANN, FGV, HSplt, Bplt, JTiasa and other pure upstream Planter whose selling CPO on spot price are the winner.
The reason why capital gain over 2 years and 1 year period from investing in UP, IOI, Simeplant and even KLK is so much lower than the small and midsize plantations is now very obvious! I shall remain focus on the small and midsize plantations like SOP, Taann, Bplant, HSplant, cepat, MHC, swkplant, Thplant. These plantations will reap the highest return from the high and increasing CPO trend.
Johnie boy From what you write I can tell you are a confident young kid You will gain wisdom with time and high cost Sell united plantations Those with wisdom will buy and hold
Johnie boy You reckon only you know figures Hahaha United plantations never even went up much this boom cycle and you think its going down Hahaha Anyway just wait and see But later sure you wont be around
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
mokluhanj21
361 posts
Posted by mokluhanj21 > 2022-04-25 13:14 | Report Abuse
thanks Indonesia for banning exports! :)
Love u Jokowi