Higher palm oil price leads to profit

NEW Britain Palm Oil ended 2010 with an after-tax profit of $US266.4 million due in part to a higher oil price in the second half of the year.
Higher palm oil price leads to profit Higher palm oil price leads to profit Higher palm oil price leads to profit Higher palm oil price leads to profit Higher palm oil price leads to profit

The results reflect increased volumes, with total oils shipped up 25.6% to 455,122 tonnes compared to 362,254t in 2009, and the improvement in crude palm oil prices from less than $800/t at the start of the year to more than $1100/t in the second half.

The company pointed out that the kina had depreciated against the US dollar by just over 6% in the first half.

Subsequently, in the second quarter the currency regained those losses and in the second half steadily appreciated to around 38c. The 2010 average rate was 36.88c against 36.65c the previous year.

These exchange rate movements were reflected in an increase in New Britain Palm Oil's foreign exchange gains from $4.3 million in 2009 to $7.2 million.

Crude palm oil and palm kernel extraction rates were seasonally affected by torrential rain in the first quarter of 2010, particularly in West New Britain where more than 2200mm (87 inches) of rainfall was recorded between January and March.

The company said that extraction rates had risen to good levels at the end of the year and so far the rainfall in 2011 had been below normal monsoon levels.

The extraction rates at the newly acquired estates showed a significant improvement in the last few months of 2010, having started considerably below the performance of the group's other oil mills.

The group average extraction rate was 22.4%, a slight decrease in its crude palm oil extraction rate of 22.8% in 2009.

2010 was a record year for oil production with about 479,000t of crude oil (crude palm oil and palm kernel oil) produced from the group's oil mills, a 30.9% improvement year-on-year.

The group now has 77,810 hectares planted with oil palm of which 69,139ha are under harvest with the balance being immature oil palms that have been planted over the past three years.

In addition, New Britain Palm Oil holds 9518ha of cattle-grazing pastures and 8231ha of sugar cane.

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