KUALA LUMPUR (Nov 20): Hap Seng Plantations Holdings Bhd (KL:HSPLANT) logged its highest quarterly net profit in nearly three years boosted by strong palm oil prices and lower operating expenses but flagged rising costs ahead.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) rose to RM55.43 million or 6.93 sen per share, an increase of over 46% year-on-year, according to an exchange filing on Wednesday. Operating expenses fell 8.8% while revenue climbed 7.7% to RM177.26 million from 3QFY2023.

“The expectation of lower palm oil production in Indonesia, higher soybean oil prices and Indonesia pushing ahead with the implementation of its B40 biodiesel mandate are expected to support the current prices,” Hap Seng said.

The average selling prices per tonne of crude palm oil (CPO) rose 4% to RM4,098 while that of palm kernel was up 27% to RM2,731. Sales for CPO were marginally higher at 36,777 tonnes, and were up 4% for palm kernel to 8,525 tonnes, the company noted.

Next year however, the proposed increase in minimum wage rate will increase its cost of production, the company said. To mitigate the impact, Hap Seng said it will continue to put “concerted efforts to improve the overall efficiencies” of its operations.

The company added that it would also practise “good plantation husbandry” to further improve fresh fruit bunches yield and extraction rates.

For the nine-month period of 2024, Hap Seng’s net profit surged 69% to RM119.63 million, compared with the same period last year. Revenue increased by 5.23% to RM519.08 million from RM493.28 million in 9MFY2023. 

No interim dividend was declared for the quarter. 

Shares in Hap Seng ended the day unchanged at RM2.07 on Wednesday ahead of the results announcement, valuing the company at RM1.66 billion. Year-to-date, the stock has risen nearly 20%.