KUALA LUMPUR (Feb 23): Oil palm plantation company Far East Holdings Bhd posted a 34% surge in net profit for the fourth quarter ended Dec 31, 2021 (4QFY21) to RM52.97 million from RM39.59 million a year prior, underpinned by higher average prices of crude palm oil (CPO) and palm kernel (PK).

In a filing with the bourse, it said average CPO and PK prices were 63% and 84% higher during the quarter, respectively.

“The average CPO price per tonne was RM5,115 (2020: RM3,140) and the average PK price per tonne was RM3,806 (2020: RM2,074),” the company said in a filing on Wednesday (Feb 23).

Earnings per share climbed to 8.92 sen from 6.67 sen a year earlier. Its quarterly revenue rose 10% to RM227.54 million from RM206.88 million in 4QFY20.

Far East said the improved earnings were also driven by an RM6.01 million higher share of profit from associated companies, RM1 million higher fair value gain recognised on investment property, as well as an RM1.5 million increase in other operating income.

The company said the final dividend for the financial year ended Dec 31, 2021, will be announced at a later date.

For the full year (FY21), the company’s net profit increased by 68% to RM164.27 million from RM97.98 million, while its annual revenue rose 4% to RM694.66 million from RM669.05 million.

Far East attributed the stronger full-year earnings to higher average CPO and PK prices per tonne of 59% and 75% respectively compared with FY20.

“The average CPO price per tonne was RM4,321 (2020: RM2,719) and the average PK price per tonne was RM2,874 (2020:RM1,640),” it said.

It added that this was further boosted by an RM33.59 million higher share of profit from associated companies, RM4.3 million higher fair value gain on biological assets, and RM1 million fair value gain recognised on investment property.

In terms of prospects, Far East said fresh fruit bunches (FFB) production is forecast to be stable in 2022, adding that it expects its financial results for 2022 to be sustained as per its performance in 2021.

“However, the group’s performance for the upcoming financial year would continue to be challenging due to the Covid-19 pandemic, rising operation costs, higher wages and labour shortages,” it noted.

Far East’s share price closed nine sen or 2.8% higher at RM3.29, giving the company a market capitalisation of RM1.95 billion.