KUALA LUMPUR (Nov 19): SD Guthrie Bhd (KL:SDG), formerly known as Sime Darby Plantation Bhd, reported a 36.75% drop in net profit for the third quarter on Wednesday due to the absence of a gain on land disposal, despite higher crude palm oil (CPO) prices.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) was RM766 million or 11.1 sen per share, compared with RM1.21 billion or 17.5 sen per share a year earlier, the world's largest palm oil producer by acreage said in an exchange filing.

In 3QFY2023, SD Guthrie recognized a disposal gain of RM600 million from selling 384 hectares of land in Kapar, Selangor. The group’s recurring earnings before interest and taxes stood at RM765 million in 3QFY2024, a 3% marginal drop from RM785 million a year ago.

However, higher CPO prices in the 3QFY2024 led to 10.33% higher revenue for SD Guthrie in the current quarter, of RM5.27 billion compared with RM4.77 billion in 3QFY2023.

The average realised CPO rose 5% year-on-year to RM3,949 per metric ton (MT) in 3QFY2024 from 3,777 per MT previously, and palm kernel (PK) prices jumped 42% to RM2,450 per MT from RM1,721 per MT.

There was no dividend declared for 3QFY2024.

For the nine months of FY2024 (9MFY2024), the group’s net profit declined 16.14% to RM1.39 billion from RM1.66 billion, while revenue increased by 10.85% to RM14.57 billion from RM13.15 billion.

The group forecasts that CPO prices will be sustained at current levels, driven by tighter supply induced by Indonesia's prolonged adverse weather conditions impacting output, and the recent change in its B40 biodiesel mandate.

Further upside to CPO prices may be limited by the supply outlook and trading premiums of substitute vegetable oils, it said.  

SD Guthrie’s group managing director Datuk Mohamad Helmy Othman Basha said strong CPO and PKO prices are expected to contribute to the overall performance of the group, supported by the strong growth in downstream business that is performing well amidst global challenges.

With that, the group expects its performance for the financial year ending Dec 31, 2024 (FY2024) to be satisfactory.

Shares in SD Guthrie settled 0.2% or one sen higher at RM4.90 on Wednesday, giving the group a market capitalisation of RM33.89 billion.