KUALA LUMPUR: PLS Plantations Bhd's net loss widens to RM31.90 million for the fourth quarter (Q4) ended June 30, 2023 (FY23) from RM417,000 posted in the same quarter last year.
Revenue slid lower to RM21.81 million in Q4 from RM44.83 million last year.
Group chief executive officer Lee Hun Kheng said that due to the Covid-19 pandemic ripple effects, the company's direct selling strategy to China was not yielding the expected outcomes.
"Hence, PLS Plantations has set its sights on refining its approach to the Chinese market.
The company is recalibrating to form collaborations with renowned players in China's wholesale and retail sectors instead of the earlier direct selling strategy," he said in a statement.
While the figures underscore certain operational challenges, they also herald PLS Plantations' strategic shift towards a more resilient and diversified future.
For FY23, PLS Plantations slipped into a net loss of RM32.7 million compared to a net profit of RM27.3 million in the previous financial year.
This was mainly due to the one-off provisions.
The impairments and write-offs, including impairment of inventories, totalling RM26.7 million, were primarily linked to the acquisition of its subsidiary, Dulai Fruit Enterprise Sdn Bhd, and adjustments in trade receivables, inventories and bearer plants.
Excluding the aforesaid one-off provisions, PLS Plantations would have reported a net loss of RM9.1 million in FY23, mainly due to the lower sales in oil palm divisions.
The company is currently engaged in discussions with multiple stakeholders to enhance its access to the Chinese market.
This collaboration aims to align interests and foster sustainable growth for PLS Plantations, allowing the company to maintain its core expertise in planting, sourcing and downstream processing.
Aside from that, PLS Plantations also reported a decline of 35.7 per cent year-on-year (YoY) in revenue to RM118.3 million in FY23 compared to RM184.1 million in FY22.
The decline in revenue and earnings can be attributed to moderated crude palm oil prices, inflationary pressures on operational costs, and the lingering effects of adverse weather on durian production.
Furthermore, the challenges in the past year were compounded by an increase in maintenance activities as the labour supply began its recovery, coupled with a slower offtake of our downstream durian products by export customers.