KUALA LUMPUR (Feb 27): Hap Seng Plantations Holdings Bhd declared a final dividend of 5.3 sen per share for the fourth quarter ended Dec 31, 2023 (4QFY2023), bringing total dividends declared for FY2023 to 6.80 sen per share — down from 12 sen last year — as full-year profit more than halved on weaker prices.

However, the quarterly results pointed to a 9.62% increase in net profit from a year earlier, as higher sales volumes of all palm products offset weaker prices of crude palm oil (CPO) and palm kernel (PK).

For the full FY2023, net profit more than halved to RM91.47 million or 11.43 sen per share, compared with RM210.32 million or 26.30 sen per share for FY2022, as revenue fell 18.01% to RM667.84 million, from RM814.55 million previously.

The lower earnings recorded for FY2023 were due to lower average selling prices (ASPs) of all palm products, mitigated by higher sales volumes of CPO and PK, as well as lower loss from fair value adjustments of biological assets of RM8.1 million.

For 4QFY2023, net profit rose to RM20.69 million or 2.59 sen per share, from RM18.87 million or 2.36 sen per share a year earlier.

Revenue for the quarter climbed 21.6% year-on-year to RM174.56 million, from RM143.55 million for 4QFY2022.

Quarter-on-quarter, revenue rose 9.6%, although net profit fell 45% from RM37.8 million, as Hap Seng Plantations recorded a loss on fair value of biological assets of RM21.1 million, compared with a gain of RM15 million in 3QFY2023.

On prospects, the group sees robust domestic palm oil consumption in the forthcoming Ramadan month in March to offset declining exports, in anticipation of lower global demand in the first half of FY2024.

“The B35 biodiesel mandate in Indonesia, which was implemented in August 2023, will reduce Indonesian palm oil exports, and is expected to support palm oil prices,” Hap Seng Plantations added.

In 4QFY2023, CPO sales volumes rose 32% to 39,824 tonnes, while PK sales volumes rose 10% to 9,584 tonnes, in tandem with higher PK production.

ASPs per tonne, on the other hand, were lower at RM3,798 for CPO and RM2,128 for PK, compared with RM4,019 for CPO and RM2,245 for PK in the preceding year.

Hap Seng Plantations shares closed two sen or 1.07% lower at RM1.85 on Tuesday, translating into a market capitalisation of RM1.48 billion for the group.