MKH Annual Report 2018

23 MKH Berhad Annual Report 2018 MANAGEMENT DISCUSSION AND ANALYSIS REPORT 16,408 hectares 90MT per hour Total planted area to-date CPO mill operating capacity Excluding the unrealised foreign exchange losses, this division recorded higher profit before tax of RM46.8 million in FY2018 (FY2017: RM22.1 million), representing a rise of 112% mainly due to increase in fresh fruit bunch production to 465,000 MT (FY2017: 398,000 MT). As a result of higher production, average CPO production cost has reduced whereas average oil extraction rate improved. Despite the lower average CPO price of RM2,160 per MT (FY2017: RM2,530 per MT), the division's revenue for FY2018 was higher compared to the preceding year due to higher CPO sales volume of 101,000 MT in the current year (FY2017: 83,000 MT) as the majority of our oil palm trees have reached prime age for harvest. Our implementation of mechanisation in the estate, which included the use of powered wheelbarrows with high- lift bin system in the collection of fresh fruit bunches, have significantly improved man-day productivity by approximately 20% due to increase in in-field mobility and greater harvest load capacity as compared to manual collection processes via conventional wheelbarrows. The total area planted as at 30 September 2018 for both plantation subsidiaries PT Maju Kalimantan Hadapan ("PT MKH") and PT Sawit Prima Sakti ("PT SPS") was about 16,408 hectares (FY2017: 16,408 hectares), with 15,623 hectares (2017: 15,623 hectares) of which have reached the mature age for harvest. Presently, PT MKH is planted with 14,877 hectares of oil palm trees aged within the range of 7 to 10 years old, while PT SPS is planted with 1,531 hectares of trees aged 1 to 7 years old. Each batch of fresh fruit bunches that arrived at the CPO mill are graded by mill workers to determine the quality of the harvested crop Harvesters using powered wheelbarrow to transfer ripe fresh fruit bunches into large bins to be transported to the mill