KUALA LUMPUR: Lingui Developments Bhd posted a net loss of RM28.1 million for 1QFY12 ended Sept 30, compared with a net profit of RM39 million a year earlier. Revenue was up 19% year-on-year to RM435 million.
In its notes to Bursa Malaysia, the timber company attributed the net loss to changes in fair value of biological assets less estimated point-of-sale costs of RM25.9 million, foreign exchange differences amounting to RM15 million, and losses in associates and joint-controlled entities of RM8.6 million.
Lingui also noted that it saw lower sales of its timber products during the quarter.
Lingui sold 186,501 cubic metres of hardwood logs at an average price of RM484 per cu m during the quarter. “Prices for hardwood logs achieved by the group remain stable due to tight log supply and relatively robust demand from India and China,” it said. It also sold 133,188 cu m of softwood logs at RM299 per cu m, and 55,910 cu m of plywood at RM1,902 per cu m.
Lingui posted an operating profit of RM19.5 million in the quarter compared with RM9.6 million a year earlier.
At the company AGM yesterday, managing director Yaw Chee Ming said Lingui is planning to invest RM143 million in FY12 for timber replanting efforts, infrastructure and upgrading of equipment. He said Lingui is looking at replanting 10,000ha to 15,000ha of its Sarawak timber plantation in FY12.
“Our hardwood trees mature between eight and 10 years. We have planted some 30,000ha and hope to replant up to 15,000ha,” he said, adding that replanting costs RM4,000 to RM5,000 per ha.
Lingui is planning to invest in and upgrade its machinery to cope with the worker shortage in Indonesia.
On its softwood plantations in New Zealand, Yaw said Lingui plans to increase its harvest to 800,000 cu m per year in the next two to three years, with the upgrading of infrastructure and amenities.
“We are investing between RM8 million and RM12 million to build roads and other infrastructure that will help increase our harvest,” he said. Lingui harvested 520,000 cu m of softwood for FY11.
On its outlook, Yaw said hardwood prices have softened and are expected to maintain at current levels given the stable demand from China and India. “Demand for hardwood from India has been quite stable despite concerns of inflation. Demand from China has remained stable although there was a slight decline,” said Yaw.
He added that plywood prices have already peaked on speculation on the rebuilding in Japan after the March 11 disaster. “The price has eased since. We expect prices to pick up again once the rebuilding in Japan begins and the stock depletes,” said Yaw.
Analysts are expecting the rebuilding in Japan to begin next year, which would increase demand for plywood. Lingui exports 60% of its plywood to Japan.
For FY11, Lingui posted RM191.7 million in net profit on the back of RM1.65 billion in revenue. It has 721,00ha of forest concessions in Sarawak and 35,000ha of forest plantations in New Zealand. It also has an associate stake in Glenealy Plantations (Malaya) Bhd.
Lingui’s stock has fallen 40% in the last six months to a low of RM1.10 before closing at RM1.54 yesterday.
This article appeared in The Edge Financial Daily, November 4, 2011.
In its notes to Bursa Malaysia, the timber company attributed the net loss to changes in fair value of biological assets less estimated point-of-sale costs of RM25.9 million, foreign exchange differences amounting to RM15 million, and losses in associates and joint-controlled entities of RM8.6 million.
Lingui also noted that it saw lower sales of its timber products during the quarter.
Lingui sold 186,501 cubic metres of hardwood logs at an average price of RM484 per cu m during the quarter. “Prices for hardwood logs achieved by the group remain stable due to tight log supply and relatively robust demand from India and China,” it said. It also sold 133,188 cu m of softwood logs at RM299 per cu m, and 55,910 cu m of plywood at RM1,902 per cu m.
Lingui posted an operating profit of RM19.5 million in the quarter compared with RM9.6 million a year earlier.
At the company AGM yesterday, managing director Yaw Chee Ming said Lingui is planning to invest RM143 million in FY12 for timber replanting efforts, infrastructure and upgrading of equipment. He said Lingui is looking at replanting 10,000ha to 15,000ha of its Sarawak timber plantation in FY12.
“Our hardwood trees mature between eight and 10 years. We have planted some 30,000ha and hope to replant up to 15,000ha,” he said, adding that replanting costs RM4,000 to RM5,000 per ha.
Lingui chairman Chan Hua Eng (left), Yaw (centre) and director Tan Sri Amirsham A Aziz at the AGM yesterday.
Lingui is planning to invest in and upgrade its machinery to cope with the worker shortage in Indonesia.
On its softwood plantations in New Zealand, Yaw said Lingui plans to increase its harvest to 800,000 cu m per year in the next two to three years, with the upgrading of infrastructure and amenities.
“We are investing between RM8 million and RM12 million to build roads and other infrastructure that will help increase our harvest,” he said. Lingui harvested 520,000 cu m of softwood for FY11.
On its outlook, Yaw said hardwood prices have softened and are expected to maintain at current levels given the stable demand from China and India. “Demand for hardwood from India has been quite stable despite concerns of inflation. Demand from China has remained stable although there was a slight decline,” said Yaw.
He added that plywood prices have already peaked on speculation on the rebuilding in Japan after the March 11 disaster. “The price has eased since. We expect prices to pick up again once the rebuilding in Japan begins and the stock depletes,” said Yaw.
Analysts are expecting the rebuilding in Japan to begin next year, which would increase demand for plywood. Lingui exports 60% of its plywood to Japan.
For FY11, Lingui posted RM191.7 million in net profit on the back of RM1.65 billion in revenue. It has 721,00ha of forest concessions in Sarawak and 35,000ha of forest plantations in New Zealand. It also has an associate stake in Glenealy Plantations (Malaya) Bhd.
Lingui’s stock has fallen 40% in the last six months to a low of RM1.10 before closing at RM1.54 yesterday.
This article appeared in The Edge Financial Daily, November 4, 2011.
