The question is whether Next Generation Oil (the lessee) can pay the lessor (Bplant) that rental amount as there is no assurance that this algae business is viable.

I hope i’m wrong…but if this algae business fails.. its very likely all 1,040 to 1,286ha of oil palm trees at the leased area would have been felled for this project and Bplant better make sure they can recover back all the losses from Next Gen Oil as this would so costly for them to replant back these area with new oil palm trees.

Bursa Announcement today:

OTHERS BOUSTEAD PLANTATIONS BERHAD ("BPB" OR "THE COMPANY") CONDITIONAL LAND LEASE AGREEMENT ENTERED BETWEEN BPB, CIMB ISLAMIC TRUSTEE BERHAD AND NEXT GENERATION OIL SDN BHD ON THE PROPOSED LEASING BETWEEN 1,040 TO 1,286 ACRES OF LAND IN TELOK SENGAT ESTATE

What on earth are they thinking..felling oil palm trees and go into algae business with no certainty it will yield profit..if this algae business is so good, petronas or other big plantation boys would have venture into it earlier..this could be disaster in the making

Asia88

You are wrong. not 100% payout.
Share capital : 1.4 billion
Dividend : RM0.023
Total dividend : RM32million
Total PAT : RM48million
32m / 48 m = 66% payout only.
25/08/2021 10:29 PM

In fact..you are wrong!!!

No of shares: 2.24 billion
Div per share: 2.3 sen/share
Total div paid : 2.24b x 2.3 sen = RM51.51m

Payout is more than 100%

https://www.theedgemarkets.com/article/boustead-plantations-ceo-leaves-take-bigger-role-boustead-holdings

@Johnzhang..expect SDP avg CPO selling price for the remaining quarters in 2021 to be much lower than MPOB and vs other companies unless price plunges below RM3,000 in 2H (as they have aggressively sold 70% of their production at below RM3,000). As for Indonesia, this has got nothing to do with forward sales. Indonesian palm oil producers are affected with their local CPO prices being suppressed after new tax structures were introduced late last year to subsidise and support their local biodiesel industry with punitive export tax and levy at over US$300 in 1Q 2021.

@Johnzhang...go find & read Maybank IB report or call their analyst who wrote this report.
They could have sold more than 1 year forward in 2020 for 2021 CPO sales when avg 2021 CPO price is still below 3000.
Just wait and see their incoming Q1 2021 announcement and look at their average CPO sold

Sime Darby Plantation have sold forward 70% of their 2021 forecast CPO production at well below RM3,000 (see Maybank IB Research on 5/5/21). This will wipe out at least RM1.4 billion of their potentially higher nett profit (at current market price marking) due to this poor hedging judgement. Last year they have also sold forward their CPO at much lower price than 2020 average price. Should sack their sales team for this costly misjudgement.