Subject: Clarification of 1st Quarter 2006 Results

To: The President The Stock Exchange of Thailand

Univanich Palm Oil Public Company Limited hereby submits the Interim Financial Statements for the quarter ending 31st March 2006, and would like to clarify Q1/2006 operating performance which is 52% higher, compared to the same period last year.

1. Production
Fresh Fruit Bunch (FFB) production from our own estates was 24.3% higher than in the same quarter of last year. This higher crop volume signals a recovery from the drought effect of last year.

FFB purchased from outside growers (OFP) was 18.7% higher volume than last year, also due to recovery from the drought and new areas of young palms coming into production.

Total FFB processed was 19.9% higher than in the same period last year. However, Crude Palm Oil production was 26.2% higher, due to significantly better oil extraction rates (oer%). The first quarter oer% is higher than in the previous three years due to the favourable weather in 2006. Soil moisture deficit in the 2006 dry season has been only 8mm compared to a cumulative deficit of 329mm during the same season last year.

2. Sales
Total Crude Palm Oil (CPO) sales volume was 4.9% higher than in the first quarter of last year. Palm Kernel Oil (PKO) sales volume was 29.9% higher, mostly due to higher production from the company’s new PKO plant in Lamthap District. Local palm oil prices were slightly better than export prices so all our CPO and PKO sales in the first quarter were to the domestic market.

The average CPO selling price was 5.4% higher than in the same period of last year, while the average PKO selling price was higher by 1.1%.

3. Cost of sales
Cost of sales of Baht 447.1 million in the first quarter was 2.6% higher than Baht 435.8 million in the same period of last year.

The higher volume of outside fruit purchases, with an average purchase price per kg which was 4.7% higher than last year, contributed to the higher cost of sales. Since there was no exporting during the quarter there were no purchases of oil to make-up export shipments.

The overall gross margin increased from 17.7% to 23.4%.

4. Net Profit
The after-tax profit of Baht 89.75 million was 52.3% higher than Baht 58.91 million in the first quarter of last year.

Three main factors affecting the improved result were

1. Higher fruit production from our own estate
2. Improved profit margin on purchased fruit due to higher volumes and increased oer%
3. Higher CPO and PKO selling prices

 

Yours faithfully,
Univanich Palm Oil PCL.

John Clendon
Managing Director