Feb 1, 2011

BW Plantation FY10 margins surge

Palm oil producer PT BW Plantation Tbk (BWPT), controlled by Widodo family, recorded a steep jump in both gross margin and operating margin in 2010 as it could control costs.
In an official statement submitted to Indonesia Stock Exchange (IDX), BW Plantation posted 65.1% gross margin in 2010 from 62.5% in the previous year.
Gross profit rose 27.1% to Rp463.85 billion in 2010 from Rp365.02 billion in 2009. In line with the rise, BW Plantation's operating profit surged 43% to Rp370.14 billion last year from Rp258.86 billion the previous year. Operating margin increased to 51.9% in 2010 from 44.3% in 2009.
BWPT booked Rp244.73 billion net profit in 2010, a 46.1% increase from Rp167.46 billion in the previous year, enabling the company to jack up its net margin to 34.3% from 28.7%.
The higher net profit reflected the company's ability to foster net sales, in line with action to control costs. Net sales rose 22% to Rp712.59 billion last year from Rp584.11 billion a year earlier.
"We can lift up out net sales bacause we achieved higher CPO average selling price by 22% to Rp7,236 per kg last year from Rp6,117 per kg in 2009," said BWPT Corporate Secretary Kelik Irwantono in the statement.
However, CPO production slightly lowered 0.1% to 91,255 tons in 2010 from 91,382 tons in 2009.
Adding to that, fresh fruit bunch (FFB) yield declined 3.7% to 26.4% from 27.4%. CPO yield fell 10.8% to 6 tons per hectare from 6.7 tons per hectare. BW Plantation CPO sales volume increased 1.6% to 91,382 tons from 89,965 tons. 
New planting
Kelik said the company made new plantation of 10,612 hectares last year, consisting of 8,895 hectares of nucleus and 1,717 hectares of plasma.
With the additional planting, planted area at end of 2010 reached 52,060 hectares, consisting of 48,197 hectares of nucleus and 3,863 hectares of plasma.
Abdul Halim Ashari, BW Plantation President Director, said the company has enabled to jack up net margin surpassing 30% in 2010.
"We believe the company can maintain its good performance by production growth as a result of matured area additional of 4,393 hectares as well as production cost control. We hope these strategies can sustain our net margin at a high level," he said.

Disclosure: No position at the stock mentioned above.  

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