BIMB Securities Research said the group’s earnings could face further decline in the second half of the year.

“This can be attributed to the anticipated decrease in the prices of palm products and increased cost pressures,” the research house said.

BPB recorded a net profit of RM5.2 million in Q1 2023, a 99% drop from the previous corresponding quarter and a quarter-on-quarter slump of 94%.

In a statement issued today, BPB said there was a slight decrease in both the oil extraction rate, which went from 20.6% to 20.4%, and the kernel extraction rate, which dropped from 4.1% to 4%.

On March 22, the company distributed its fourth interim single tier dividend of 3.3 sen per share, amounting to RM73.9 million, for the previous financial year (FY 2022).

Prospects for the rest of 2023

BIMB Securities said heavy rainfall and floods in certain areas in Malaysia had a negative impact on palm oil production in Q1 2023.

To make matters worse, it said, crude palm oil (CPO) prices are expected to weaken in the second half of 2023 (H2 2023) as production rises, leading to higher inventory and subdued demand.

BPB’s share price ended the day at 70 sen, down six sen or 7.24% from yesterday’s close, giving it a market capitalisation of RM 1.58 billion.