Subject: Clarification of Results for the year 2007

To: The President Stock Exchang of Thailand

Univanich Palm Oil Public Company Limited hereby submits the Company’s Financial Statements for the year ending 31st December 2007 and would like to clarify the operating result which is 33.5% higher than in the previous year.

1. Production
Fresh Fruit Bunch (FFB) production from our own oil palm estates was 20.5% lower than in the previous year. The lower crop production was due to the delayed effect of the 2005 dry season. In Thailand overall , FFB production decreased by only 6.4% since the reduced yield per hectare was partly compensated by new planting coming into production.

The volume of FFB purchased from outside growers was 3.1% lower than in 2006. New production from farmers around the purchasing area compensated for the lower crop yields.

Total FFB processed by Univanich factories was 6.2% lower than in 2006. Crude Palm Oil (CPO) production decreased by 10.8% due to a lower oil extraction rate which was a feature of 2007 production throughout Thailand. Total production of 133,636 tonnes Crude Palm Oil and Palm Kernel Oil was 9.6% lower than the previous year due to the seasonal factors mentioned above.

2. Sales
Total palm oil sales volume was 3.8% higher than in 2006 and 21.4% of this sales volume was third party oil purchased to make up the volume required for export shipments. The sales volume of seeds and seedlings also started to recover in 2007 due to good demand for Univanich seeds from overseas growers.

The average selling price of CPO was 52.7% higher , and average PKO price was 40.8% higher than in the previous year. The high average prices more than compensated for the lower crop production from own plantations and for the lower oil extraction rates which depressed crushing margins in our purchased fruit business. The high prices resulted from (a) rapid consumption growth in major developing economies (b) high petroleum prices driving new demand for oleochemicals and biofuels and (c) slower growth in competing soya oil production following a reduction of soyabean area in USA where farmers have been encouraged to switch to cultivation of corn for Ethanol production.

Overall net proceeds of sales increased by 57.1% over the previous year, to Baht 4.497 billion, mainly due to the significantly higher palm oil price and higher sales volume.

3. Cost of Sales
Cost of sales of Baht 3,819.6 million increased by 66.1% over the previous year mainly due to higher prices of purchased fruit and higher volumes of palm oil purchases. The average purchase price per kg of FFB was 63.2% higher than in 2006, following the higher palm oil prices.

The overall gross margin declined from 19.7% in 2006 to 15.1% in 2007 mainly due to higher FFB purchase price and the very low margins on third party oil purchased to make-up for export shipments.

4. Net Profit
Fourth quarter after tax profit of Baht 166.80 million was 51.8% higher than in Q4 last year, due to the rising prices and recovery of crop production towards the end of the year.

Net profit after tax for the year ending 31st December 2007 was Baht 505.16 million (Baht 5.37 per share), an increase of 33.5% over the previous year. The higher palm oil prices have compensated for the generally lower crop production.

 

Yours faithfully,
Univanich Palm Oil PCL.

Mr. John Clendon
Managing Director

cc:
The Secretary-General
The Securities and Exchange Commission