KUALA LUMPUR (Nov 24): Sime Darby Plantation Bhd registered a net profit of RM1.21 billion, or 17.5 sen per share for the third quarter ended Sept 30, 2023 (3QFY2023), a threefold jump from RM396 million or 5.7 sen per share in the previous year’s corresponding quarter. 

The plantation group recorded higher recurring profit before interest and tax (PBIT) for the upstream segment, which jumped 120% to RM547 million from RM249 million in the previous year. This was due to a 14% increase in fresh fruit bunches (FFB) production to 2.45 million metric tonnes (MT) as a result of intensive rehabilitation efforts, as well as higher oil extraction rate from 20.88% to 21.12%.

Additionally, the group recorded a non-recurring PBIT of RM876 million, more than 62 times than the RM14 million registered in 3QFY2022, mainly due to the RM607 million gain from land sale in Malaysia and the RM278 million gain from the stake disposal in two Indonesian subsidiaries, namely PT Ladangrumpun Suburabadi and PT Sajang Heulang. 

Apart from that, Sime Darby Plantation recorded an impairment charge of RM9 million in respect of the group’s rubber plantation in the country. 

Its quarterly revenue, meanwhile, fell 11.46% to RM4.77 billion from RM5.39 billion a year earlier, amid lower crude palm oil and palm kernel average realised prices, which fell by 12% and 11% respectively, its filing showed on Friday.

There was no dividend declared for 3QFY2023. 

For the nine months of FY2023 (9MFY2023), the group’s net profit declined 13.81% to RM1.66 billion from RM1.93 billion, as revenue decreased 14.4% to RM13.15 billion from RM15.36 billion. 

Looking ahead, Sime Darby Plantation said it is optimistic of achieving higher FFB production in FY2023, largely driven by improvements in labour productivity and field conditions in its Malaysian operations. It also continues to explore further growth in the new and existing markets, particularly via its downstream arm, Sime Darby Oils.

“After the setbacks suffered between 2020 and mid-2023, we are seeing the results of months of rehabilitation work, with an increased workforce successfully turning around our upstream Malaysia operations in 3QFY2023. We expect to achieve the full complement of harvesters for Sabah and Sarawak by the end of the year, and by mid-2024, these harvesters will acquire sufficient skills to be more productive,” said its managing director Datuk Mohamad Helmy Othman Basha.

“We will also continue to localise our workforce, as we are no longer recruiting new foreign workers for non-harvesting work. While the rehabilitation work continues and is expected to be completed by mid-2024, I’m pleased to report that our labour shortage crisis is now behind us. We remain steadfast in our focus to reduce long-term dependence on manual labour, through mechanisation, automation and digitalisation,” he added.

At Friday’s noon break, shares of Sime Darby Plantation slipped 0.23% to RM4.35, giving it a market value of RM30.08 billion.