Review of Operations - Genting Group

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SM SM 36 GENTING BERHAD A nnual Report 2006 sm Oil Palm Plantation PLANTATION www.asiatic.com.my The Malaysian oil palm industry had a good year with export earnings rising to a record RM31.8 billion and crude palm oil (“CPO”) production rising to 15.9 million tonnes. Although continued global demand boosted the industry’s average CPO price to RM1,504 per tonne in 2006 (2005: RM1,390 per tonne), strong production and higher stock levels resulted in softer pricing for palm kernel (“PK”) to an average of RM905 per tonne in 2006 (2005: RM1,018 per tonne). In tandem with the industry’s performance, the 2006 average selling price per tonne achieved by the Plantation Division for CPO was RM1,520 (2005: RM1,398) and for PK was RM897 (2005: RM1,017). The Division’s fresh fruit bunch (“FFB”) production recorded a new high of 1.13 million tonnes, due to an increase in mature harvesting area. The higher output was achieved on the back of the Division’s increase in planted area, which totalled 59,534 hectares in 2006 (2005: 58,318 hectares). Another 1,216 hectares were planted with oil palm in the Asiatic Jambongan Estate in 2006. Total mature area in the Asiatic Indah and Asiatic Permai Estates was about 5,000 hectares, contributing some 34,352 tonnes of FFB to the Division. The Division’s six oil mills in Malaysia with a total milling capacity of 255 tonnes per hour, achieved an average oil extraction rate of 20.52% in 2006 (2005: 20.98%). The slightly lower extraction rate was due to higher rainfall recorded, especially in February and December, which flooded some lowland areas of its estates. The Serian Palm Oil Mill (the joint venture oil mill between the Division and the Sarawak Land Consolidated & Rehabilitation Authority) processed 225,436 tonnes of FFB in 2006, which was 6% lower than the previous year. During the year, the mill achieved average oil and kernel extraction rates of 22.01% and 4.71%, translating into an increase of 3% and 8% respectively, as compared to the previous year. PLANTATION STATISTICS Area (Hectares) Oil Palm Others Titled Area 2006 2005 2006 2005 2006 2005 Mature 53,968 51,068 - - 53,968 51,068 Immature 5,566 7,250 - - 5,566 7,250 Total Planted Area 59,534 58,318 - - 59,534 58,318 As a percentage (%) 100 100 - - 100 100 Clearing/Planting in progress/Unplanted Jungle Area - - 17,418 4,665 17,418 4,665 Labour Lines, Buildings Infrastructure, etc. - - 2,858 2,681 2,858 2,681 Property Development - - 415 340 415 340 Total Area 59,534 58,318 20,691 7,686 80,225 66,004 Percentage Over Titled Area (%) 74.2 88.4 25.8 11.6 100 100 Production (mt) 1,132,026 1,099,285 - - - - Yield Per Mature Hectare (mt/kg) 21.4 22.1 - - - - Average Selling Price CPO (RM/mt) 1,520 1,398 - - - - Palm Kernel (RM/mt) 897 1,017 - - - -
SM SM GENTING BERHAD 37 Annual Report 2006 Nursery at Ketapang Land, Indonesia Residential developments in Asiatic Indahpura, Johor The Division commenced the development of its 98,300- hectare joint venture operations in Kalimantan, Indonesia. sm The joint venture operations will be developed over a 10-year period. The first site preparation for pre-nursery and main nursery comprising 30 hectares, began in early May and was completed in June 2006. The site preparation works for another 48 hectares began in October and was completed in late November. As at year-end, more than 40% of the seeds sown were transplanted from the pre-nursery to the main nursery to cater to the planting of Phase 1 in 2007. PROPERTY www.asiatic.com.my The Property Division recorded an 8% increase in revenue to achieve a total of RM107.9 million in 2006 (2005: RM100.2 million), despite a challenging property market environment arising from higher oil prices, interest rates and utility tariffs. The Division’s profit before tax in 2006 was RM25.7 million (2005: RM23.2 million). The Division is led by Asiatic Land Development Sdn Bhd, which develops the Asiatic brand of properties. Asiatic Indahpura, the Division’s flagship project of mixed residential and commercial developments in Johor was the key contributor to the Division, with sales of RM64.9 million in 2006. The sales were mainly derived from its newly launched double-storey and single-storey terrace houses. The Division’s one-stop automotive centre, the Asiatic Indahpura Car City continued to grow with the establishment of 6 new units of car service centres, in addition to the existing 5 car showrooms and 4 service centres. Asiatic Cheng Perdana in Melaka continued to generate good revenue of RM10.2 million, despite being at the tail end of its development. The revenue is mainly contributed from the progress billings of its single-storey terrace houses under construction. The development activities in Asiatic Permaipura, Kedah were relatively subdued due to market conditions. On the other hand, the Permaipura Golf and Country Club, one of the popular golf clubs in Kedah, performed reasonably well despite strong competition from surrounding golf clubs. Asiatic Permaipura continued its marketing efforts by introducing innovative tournament packages to attract more local and foreign golfers to the club. The Kijal Beach Resort Apartments, which are strategically located beside Awana Kijal Golf, Beach & Spa Resort in the east coast of Terengganu, continued to enjoy good tenancy and registered an average rental occupancy rate of 68% in 2006. The 89 units of apartments offer panoramic views of the South China Sea and overlook Awana Kijal’s 18-hole championship golf course. Commercial developments in Asiatic Indahpura, Johor Kijal Beach Resort Apartments, Terengganu
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Review of Operations - Genting Group

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