KUALA LUMPUR (May 31): Sime Darby Plantation Bhd (KL:SIMEPLT), the world’s largest palm oil producer by acreage, said on Friday its first quarter net profit tripled from a year earlier, thanks to lower tax and strong downstream operations.

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM211 million compared to RM69 million over the same period a year earlier, Sime Darby Plantation said in an exchange filing. Revenue for the quarter rose 6.7% year-on-year to RM4.34 billion from RM4.07 billion in 1QFY2023.

In the near term, crude palm oil prices are expected to remain “supported due to continued geopolitical tensions and the anticipated effects of extreme weather events in producing countries which may impact supply of vegetable oils globally,” Sime Darby Plantation said.

The company also sees continued growth in fresh fruit bunch production in 2024, thanks to “concerted efforts to rehabilitate its Malaysian upstream operations and accelerating its mechanisation and automation efforts”.

No dividend was announced for the quarter.

Sime Darby Plantation, which will officially change its name to SD Guthrie Bhd beginning June 5, said in a separate statement that it will focus on reducing costs through “various transformational initiatives, and to drive operational excellence.”

The company also remains “committed to pursuing new opportunities for business growth,” the company said.

In terms of segments, its upstream operations reported earnings before interest and tax of RM265 million, an increase of 20% from 1QFY2023, as higher production helped offset lower selling prices during the quarter.

Fresh fruit bunch production rose 9% to 1.98 million tonnes in 1QFY2024, driven by strong recovery of its Malaysian operations. Average realised crude palm oil per tonne slipped to RM3,880 from RM3,887 in 1QFY2023.

Earnings before interest and tax at its downstream sector, meanwhile, surged 78% in 1QFY2024 to RM121 million on the back of higher volume demand for Asia-Pacific bulk and differentiated refineries, as well as improved margins in Europe.

Shares of Sime Darby Plantation were unchanged ahead of the results announcement. At RM4.26, the company is valued at RM29.46 billion on Bursa Malaysia as of noon trading break.