Wednesday 28 Feb 2024
main news image

KUALA LUMPUR (Aug 23): Sime Darby Plantation Bhd's net profit for the second quarter ended June 30, 2022 rose 31.6% year-on-year (y-o-y) to RM812 million from RM617 million, driven by its upstream and downstream segments and non-recurring activities.

In a Bursa Malaysia filing on Tuesday (Aug 23), the plantation group said revenue for the quarter rose to RM5.59 billion from RM4.41 billion earlier.

Earnings per share was 11.7 sen against nine sen previously.

It declared an interim dividend of 10 sen per share, to be paid on Nov 18.

For the six months ended June 30, Sime Darby Plantation said its net profit rose to RM1.53 billion from RM1.18 billion a year prior, on the back of revenue of RM9.97 billion versus RM8.08 billion previously.

Reviewing its performance, the group in a separate statement said buoyant crude palm oil (CPO) and palm kernel (PK) prices continued to support the group’s stronger y-o-y performance, although its fresh fruit bunch (FFB) production was impacted by a prolonged labour shortage experienced in its Malaysian operations.

It said that in the second quarter, average realised CPO prices increased by 44% y-o-y to RM5,213 per metric tonne (MT), while average realised PK prices rose by 40% y-o-y to RM3,339 per MT.

Meanwhile, the group said its downstream segment Sime Darby Oils’ higher profits were mainly attributable to better margins recorded by its Asia Pacific operations which mitigated the lower margins in its European operations as well as the overall lower sales volume achieved.

Sime Darby Plantation group managing director Mohamad Helmy Othman Basha said the shortage of legal migrant workers in Malaysia has affected  productivity whilst new measures instituted to create a better working environment have increased cost of production.

“To address these issues, we have taken bold steps to mechanise, automate and digitalise work that has traditionally been performed manually, thus reducing our labour requirements.

“Even as we implement plans to mechanise and automate the Malaysian operations, we have started a whole new exercise to transform our palm oil mills into certified food safety facilities across our operations,” he said.

On the outlook for FY22, Mohamad Helmy said with the gradual moderation of CPO prices, palm oil has now become more competitive for destination markets, prompting an increase in demand as buyers replenish inventories.

“The group expects CPO prices to remain firm at least until the end of 2022.

“Unfortunately, the delay in the intake of new legal migrant workers continues to disrupt the group’s harvesting and related activities in its Malaysian operations.

“This is expected to affect the group’s overall FFB production, which is anticipated to be lower compared to FY21,” he said.

At the midday break on Tuesday, the counter fell 2.67% or 12 sen to RM4.38 with 263,000 shares traded.

      Text Size