KUALA LUMPUR, August 6, 2008 – In a strategic move that is aimed at enhancing unitholders value, Al-Hadharah Boustead REIT (REIT) intends to increase its plantation size from 12,000 hectares to 16,000 hectares with the acquisition of two more plantations, namely the Bebar and Malakoff estates in Pahang and Penang respectively.
Both estates will have a total land area of more than 3,700 hectares and will be acquired at an aggregate purchase consideration of RM192 million that will be funded by Syariah complaint bank borrowings and issuance of new units of the REIT.
On this score, the REIT continues to chart positive growth based on its financial performance for the six months ended June 30, 2008.
For the period under review, the Fund posted an unaudited revenue of RM36.3 million, which constitutes a 57% increase over the same period last year. This was derived from a portfolio of eight oil palm plantations with a total hectarage in excess of 12,000 hectares, as well as two palm oil mills. Out of the revenue, RM15.5 million stem from its performance-based profit sharing structure while RM20.8 million was achieved from rental income.
On this score, the Fund was able to achieve an actual average palm oil price of RM3,026 per metric tonne (MT) against the reference price of RM1,500 per MT in the first six months of 2008. Hence, due to this performance-based profit sharing mechanism, the additional profit in excess of RM1,526 per MT translated to a sterling gain for the Fund.
As a result, the Fund’s net earnings per unit for the period under review was 7.13 sen, marking an increase of 34% over the same period last year.
In terms of unit price, the Fund reached a high of RM1.55 in February 2008 and subsequently closed at RM1.42 as at June 30, 2008. This represented a significant increase over its Initial Public Offer price when the Fund was listed in February 2007.
In conjunction with the Fund’s unaudited financial statements announced today, YBhg. Tan Sri Dato’ Lodin Wok Kamaruddin, Chairman of Boustead REIT Managers Sdn Bhd said, “We have seen very strong growth over the first six months of this year thanks to crude palm oil prices. Unitholders are enjoying significant returns thanks to our winning profit sharing structure.”
In tandem with the positive performance of the Fund, the Managers have proposed a distribution of 3.69 sen per unit in respect of the period under review, which has been approved by the Trustee, CIMB Trustee Berhad, on August 1, 2008 and will be paid on August 29, 2008.
“While there may be cyclical and speculative pressures on CPO prices in the future, we are optimistic that pricing for this highly sought after commodity will remain strong. The Fund will also maintain its prudent approach when it comes to forward sales without affecting our growth strategy,” YBhg. Tan Sri Dato’ Lodin concluded.
Forward looking statements
This release may contain certain forward-looking statements with respect to the financial conditions, results of operations and business of the Fund and certain plans and objectives of Boustead REIT Managers Sdn Bhd with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.-ends-
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