Posted by LossAversion > 2024-04-25 16:43 | Report Abuse

@Pinky, so fortunate of you to be able to attend physical AGM. People like me who live far away cant 'follow' the meeting if there is no (dumb) virtual opportunity!

Posted by Pinky > 6 hours ago | Report Abuse
Virtual meeting is dumb and bad for shareholders

Posted by BudiLee > 2024-04-25 16:47 | Report Abuse

Last 10 minutes everybody

Posted by BudiLee > 2024-04-25 16:47 | Report Abuse

Will the magic happen?

Posted by BudiLee > 2024-04-25 16:48 | Report Abuse

Mardi Bross will come all the way from Indonesia

Posted by BudiLee > 2024-04-25 16:57 | Report Abuse

ImmuneSystemHero.com

Posted by BudiLee > 2024-04-25 16:59 | Report Abuse

Last 1 minute!

Posted by BudiLee > 2024-04-25 17:00 | Report Abuse

Yeaaaaa RM26.380 , good number

Posted by Sardin > 2024-04-25 23:49 | Report Abuse

Hold your shares tightly. For those who want to buy, the trees do not grow to heaven so plan carefully. I am surprised that Dato Carl Bek-Nielsen can speak very good Malay. Someone asked me to give a hint if it is good to buy before ex-date. Well, Q1 report is released by end of the day of AGM, so I think it is better to answer after reading the Q1 report. And after reading the Q1 report, it is already end of before ex-date. I think the dates are set by the management with the intention of giving us the opportunity to be fully informed before we decide to buy or sell, the time given is not more or less and is just enough.

Posted by JrWarren > 2024-04-26 08:28 | Report Abuse

@Sardin, I agree with you that the date is carefully plan to release the QR long time ago.
With the current order book, production data, CPO price and adequate cash reserve, a reasonable price movement is expected.
Business model is adequate for contract sales to eliminate most receivables and take advantage at cash position. UP cash position never fail me and always at 1/3 or 1/4 of its annual revenue.

Posted by BudiLee > 2024-04-26 10:16 | Report Abuse

Yes, I agree with both of you. I think it is now is the best time to get some more shares as the price is still low. I'm sure before lunch time of today it will surpass RM25 again

Posted by ooihk899 > 2024-04-26 10:34 | Report Abuse

Another good QR, the price will be above 30.
Sardin, any highlite in AGM? Appreciate if you share.

Posted by Sardin > 2024-04-26 11:09 | Report Abuse

I thought you were there. You wore the UP t-shirt right?

Posted by ooihk899 > 2024-04-26 11:29 | Report Abuse

Oh, I did not attend. You got the wrong guy.
Appreciate if you can share. 🙂

Posted by Sardin > 2024-04-26 12:17 | Report Abuse

I would like to start with my opinion and conclusion. There is hardly or no any information in the AGM that you can use to speculate the share price. In my opinion, the AR and QR can give you a better idea if you want to set a target price for the share.

The AGM started with a presentation by Dato' Carl Bek-Nielsen. All the content can be found in UP website and AR2023. It is good for less sophisticated people who do not read reports, but no new information for those who read the reports. I would like to say that this is very fair to people who are unable to attend. So UP is very transparent and thoughtful to feed all you need to know and "can know" through the published annual report at your convenience to read it miles away.

After the presentation is the Q&A session. As my fingers are slow I just rely on my ears and brain to record. I could be a biased listener and am an old man. So bear in mind this when I try to recall something.

1. Will UP make more profit in 2024? "Time will tell" said DCBN.
2. Is EPS and DPS uptrend going to last? "Don't be too greedy." "It is dangerous to be too greedy." "The trees do not grow to heaven." "Don't push too hard lah... (everybody laugh)"
3. Expansion? Buy more land? More capex? Cannot tell even if there is such a plan to avoid competition in the bidding. "We don't want to have 10 times land bank but make only half the profit (or profit margin?)."

Other questions and answers are not so important / does not give really useful information (at least for me). I think I missed some of it too. If given a chance to be transported to the AGM via time portal, what would you want to ask? Maybe your question and help me to recall something.

Posted by Pinky > 2024-04-26 12:25 | Report Abuse

Thanks Sardin 👍

Posted by moven00 > 2024-04-26 12:36 | Report Abuse

@ Sardin
Did they manage to resolve the labor shortage issue at UP? Anyone ask on this? Are they still relying on Guess Worker? Anything mention on this in the AGM?

Posted by JrWarren > 2024-04-26 12:47 | Report Abuse

Thank you for the info Sardin. Plantation is a business depends on weather, what human can do is preparing for all the possible crisis and hope for the best, such as water shortage mitigation, forex fluctuation, and other controllable factors are well mitigated.... God factor such as El Nino and CPO price movement are out of control.

QR got addressed labor issue, read it.

Posted by ooihk899 > 2024-04-26 12:49 | Report Abuse

Thanks Sardin👍.

Posted by Sardin > 2024-04-26 15:20 | Report Abuse

Hi Mooven, I can't recall any question regarding to labour. In AR2023 you can see UP hires thousands of guest workers, and it mentioned for the first time they have more than enough labours. "...tireless efforts by our HRSS Department in bringing in 781 new Guest Workers through our Ethical Recruitment Procedures during the year. As I write this message, I can confidently state that we for the first time in years are ahead of our respective work." page 23 AR2023.
programmes.

Posted by observatory > 2024-04-27 00:00 | Report Abuse

I compared 1Q24 results against 4Q23. This is what I found. For those who have studied please share your findings too.

4Q23 revenue: RM544m
1Q24 revenue: RM477m (-12% QoQ)

4Q23 operating profit: RM255m
1Q24 operating profit: RM171m (-33% QoQ)



Plantation segment:

4Q23 segment revenue: RM337m
1Q24 segment revenue: RM309m (-8% QoQ)

4Q23 segment operating profit: RM218m
1Q24 segment operating profit: RM154m (-29% QoQ)



Refinery segment:

4Q23 segment revenue: RM376m
1Q24 segment revenue: RM320m (-15% QoQ)

4Q23 segment operating profit: RM38m
1Q24 segment operating profit: RM16m (-56% QoQ)

Posted by observatory > 2024-04-27 00:03 | Report Abuse

On plantation revenue, 1Q24 CPO volume was far lower than 4Q23. Note B2 explains “The revenue for plantation segment decreased by 8.3% in the current quarter from the preceding quarter due to lower production”

This was partly due to seasonality as CPO production declines from October to February (refer note A3).

However, a bigger factor is 4Q23 CPO production volume was exceptionally high at 70k MT, 15% higher than same period in 2022. 1Q24 CPO production volume has since moderated back to 55k MT.

Was the high production volume in 2H23 an aberration? How about decline in Jan-Feb and subsequent recovery in Mar? Has anyone studied other company outputs and how do they compare? Did the management say anything during the AGM?

The 1Q24 CPO production volume 55,446MT * RM4,179 = RM232m is about 75% of 1Q24 plantation revenue. The other one quarter revenue may be contributed by PK, coconut and other factors I’m not aware of.

Posted by observatory > 2024-04-27 00:03 | Report Abuse

Note B2 explains that refinery segment revenue declines due to “due to lower sales volume”, I believe in tandem with the previously mentioned lower production volume.

QoQ, segment PBT declined 58%, and segment operating profit declined 56%.

Three reasons cited in the note
1. Lower volume hence lower profit
2. Higher forex loss at JV Unifuji (where share of profit declined from RM8m to RM1m)
3. Higher hedging losses as Unitata, which sold contracts earlier at lower prices, later had to unwind position and bought at higher prices to cover earlier position. Such hedging losses happened in a rising market just like in 2022. But when Unitata sells refined products, hopefully at higher prices too, a better margin could offset the losses.

Don’t know how to estimate the hedging effects on profits/ losses. If anyone has any idea, please share your working.

Posted by ooihk899 > 2024-04-27 10:04 | Report Abuse

Bro, look forward, they sold forward around 195K tons @41xx
for next 12 months, remaining of FY 2024 should be ok unless
CPO price move above RM4200.
I'm more concern about next year Q1, Hari Raya n CNY in same Q.
They might incur hedging loss again.

Posted by JrWarren > 2024-04-27 12:57 | Report Abuse

Everybody who owned palm oil stock long enough know that the production output has SEASONAL factor.
It is right to compare output and revenue for the same period (1Q2024 vs 1Q2023),
but comparing this quarter (1Q2024) vs last quarter (4Q2023), confirm will get negative result due to the above Seasonal factor.
On the other side, if comparing a company WITHOUT seasonal factor (ie real estate, petro, electricity ...), I will compare last Q with this Q.

I give less concern on the hedging part because the contracts are sold with fixed amount, UP has budget to deal with it and forex hedging contract in place.
If the CPO went above contract price, I use my own crops for production; if below contract price, I buy cheaper crops at spot price for production.
Until I fulfilled all my delivery contract.

Forex hedging just to lock on exchange rate for easy budgeting and forecast the profit.

What stakeholder should concern is current order book, monthly production and CPO price.

Posted by Sardin > 2024-04-27 13:20 | Report Abuse

My findings:
Good weather makes more good to efficient plantations than mediocre plantations. Bad weather makes more damage to efficient plantations than mediocre plantations. Pray for good weather.

Posted by observatory > 2024-04-27 17:05 | Report Abuse

@ooihk, what are the implication of Hari Raya and CNY on the same quarter, and by how much?

Posted by observatory > 2024-04-27 17:05 | Report Abuse

@JrWarren,
The 20% QoQ production decline in 1Q24 (versus 4Q23) cannot be explained by seasonality alone.

From historical first quarter perspective, 1Q24 output of 55k MT is probably normal.

But 4Q23 output (70k MT), and in fact 3Q23 output (80k MT), are EXCEPTIONALLY high.

I draw this conclusion from the published production data. On YoY basis, 4Q23 and 3Q23 have recorded 15% to 16% increase. Quite unusual.

Own CPO (MT) Quarter YoY
55,446 1Q24 3%
70,149 4Q23 15%
79,641 3Q23 16%
62,295 2Q23 -7%
53,888 1Q23 -7%
60,851 4Q22 10%
68,942 3Q22 -4%
66,731 2Q22 0%
57,866 1Q22 -1%
55,474 4Q21 5%
71,449 3Q21 6%
66,460 2Q21 6%
58,217 1Q21 -2%

I wonder if the 2H23 output surge is an aberration.

Posted by observatory > 2024-04-27 17:08 | Report Abuse

Does UP refinery use own crop when CPO price is high, and use 3rd party crop bought at spot price when CPO price is low?

With due respect, I doubt it works this way.

If the refinery uses 3rd party crops bought at spot price on a large scale, what will its plantation business do with own crops?

If they sell their own crops, it’s still at spot price.

If they stock them up on a large scale waiting for better prices in the future, it will be speculation which is against their purpose of hedging in the first place. Besides it’s also unclear to me for how long the produce stocks can be kept in inventory.

In fact, as deduced from the balance sheet, UP keeps not more than half of a month of produce stocks.

Posted by observatory > 2024-04-27 17:26 | Report Abuse

@Sardin, refer to your statement. Do you mean that 2H23 was good weather and therefore it was exceptionally good for UP?

BTW do you study and compare against production data of other plantation companies? If yes, mind sharing the summary of your data?

Posted by Sardin > 2024-04-27 17:36 | Report Abuse

Hi Observatory, the extraordinary dip of production in Feb 2024 was likely due to El Nino. But rainfall improves in Mar. That's not the explanation from UP, but my own belief based on info collection from various references. Exceptionally good 2H23 (vs year 2022) was mainly due to resolve of labour shortage.

Posted by Sardin > 2024-04-27 17:39 | Report Abuse

Please recall excessive heat started quite some time before FEB 2024 and so the effect manifest in FEB 2024.

Posted by observatory > 2024-04-28 14:45 | Report Abuse

Yeah labor availability would help. So is uplift in productivity. The Annual Report mentions that UP Malaysia now runs its operation with 10% lower workforce despite 9% larger land bank as compared with pre-Covid period. Quite amazing.

Posted by Sardin > 2024-04-28 16:43 | Report Abuse

This effect of productivity improvement thanks to mechanization is a common phenomenon among large plantations (such as IOI & Sime Darby), not UP alone, if you follow the news.

Posted by observatory > 2024-04-28 20:21 | Report Abuse

I see. I don’t follow other planters in details. However, when I tabulate the CPO yield per hectare of several large and mid-size companies like IOI, Simeplt, KLK, Kim Loong and Innoprise, they’re still about the same or below 2015/16 level. UP is the only one which has made sustainable gain due to improving FFB yield.

Posted by ooihk899 > 2024-04-28 20:29 | Report Abuse

UP has technical people as research director sitting on the board.
Others dun have. That's the difference.

Posted by ooihk899 > 2024-04-28 20:32 | Report Abuse

Also, both brothers have agriculture education background.

Posted by observatory > 2024-04-28 20:35 | Report Abuse

Yeah. UP is proud of its research.

Looking at the UP Group CPO Yield chart, the UP Group yield has widened its lead over Malaysian average since 2016, which is a year with severe El Nino impact.
I suspect one of the reasons is the low CPO price during mid 2010s discouraged other companies from investing while UP ploughed on. The difference only showed up years later.

Posted by goldenhope > 2024-04-30 08:38 | Report Abuse

Good company to hold and keep accumulate using dividend payment

Posted by Sardin > 2024-04-30 16:43 | Report Abuse

More exciting than action movie.

Posted by KClow > 2024-05-03 10:13 | Report Abuse

Utdplnt will go up to 15b market cap
@rm35

Posted by BudiLee > 2024-05-08 12:49 | Report Abuse

Yup! Enjoy your UP Dividend payment next week! 14.05.24

Posted by dam82 > 2024-05-09 11:20 | Report Abuse

so happy happy ...

Posted by Greenying > 2024-05-09 12:40 | Report Abuse

Cheers👍🍻

Posted by BudiLee > 2024-05-09 14:08 | Report Abuse

Wow today is a good movement. Do you think by the end of tomorrow UP will surpass 26?

Posted by Pinky > 2024-05-09 14:43 | Report Abuse

High dividend yield and good price appreciation

Best of the best

Posted by ooihk899 > 2024-05-10 17:31 | Report Abuse

Wow!! April production YoY up 14%, YTD up 5.7%. against 2023.
Hopefully profit will also be all time high. 😁🤑
Looks like Tanarata production go into full swing now.😄

Posted by observatory > 2024-05-11 00:35 | Report Abuse

CPO production for Apr 23 was exceptionally low at 18k MT. Output for Apr 22, 21 and 20 were much higher, in the range of 21k-23k MT. In fact higher than Apr 24.

Posted by ooihk899 > 2024-05-11 10:29 | Report Abuse

Weather in 2023 n 2024 are El Nino, 2020,2021,2022 are La Lina.
Production qty definitely different.

Posted by observatory > 2024-05-11 16:51 | Report Abuse

It’s possible.

However, the overall YoY trend is like this
1) decline in 1H23
2) increase in 2H23
3) decline again in Jan-Feb 24
4) increase in Mar-Apr 24

If 2023-24 was adversely affected by El Nino, UP should not have enjoyed bumper crops in 2H23. But they did as 2H23 CPO output was 156k MT vs 2H22 135k MT, i.e. +15% YoY.

More likely multiple factors were at work. Labor arrival in 2023 as suggested by Sardin played a part. Maybe local weather condition too. Biological resting phase once mentioned by the management may have also skewed the data.

The Tanahrata replanting during 2019-21 should have started to contribute. However, from the overall group perspective, the contribution should be gradual without any step change. For the past number of years, typically 1000+ ha is replanted each year -- except 2,444ha in FY19 after Pinehill/ Tanarata acquisition; and 462ha in 2022 probably due to labor shortage. So improvement due to high-yielding seeds should happen all the time but gradually.

In short, I can’t figure out any specific factor leading to the up and down in output. But without doubt, the continuous replanting regardless or market conditions will steadily lift output over the long term.

Posted by BudiLee > 2024-05-13 23:18 | Report Abuse

Have a good rest, everybody, because tomorrow we all are receiving the Payment from UP yeay .. payment day is tomorrow.