KUALA LUMPUR (Nov 27): Genting Plantations Bhd’s (KL:GENP) third quarter net profit rose a marginal 3.15% from the same quarter a year earlier despite lower revenue, thanks to higher other income due to the impact of foreign currency fluctuations on the group’s US dollar denominated cash reserves and borrowings.

It notched a net profit of RM83.05 million for the third quarter ended Sept 30, 2024 (3QFY2024), up from RM80.52 million in 3QFY2023, its bourse filing showed. The impact of the forex fluctuations was reflected in its 'others' segment, which saw a jump in profit before tax (PBT) to RM19.5 million from RM1.9 million. No dividend was declared for the quarter.

The group's revenue fell 7.4% to RM718.53 million from RM775.8 million, as it recorded lower sales in its downstream manufacturing segment, partly mitigated by higher palm product prices.

It said crude palm oil price stood at RM3,725 per tonne in 3QFY2024, up 9% from RM3,409 in 3QFY2023, while palm kernel price jumped 46% to RM2,590 per tonne from RM1,776.

The plantation segment's PBT dropped 8.3% to RM199.6 million from RM207.6 million a year ago due to lower sales volume of palm products. Its property segment also saw a marginal decline in PBT to RM7.5 million from RM7.8 million, dragged by higher operating expenses.

For the first nine months of FY2024, the group’s net profit rose 10.9% to RM211 million from RM190.3 million in the same period in FY2023, despite a 3.9% dip in revenue to RM2.08 billion from RM2.17 billion.

The group expects palm oil prices for the immediate term to be supported by concerns over tightening global palm oil supply. This is due to the anticipated strong festive-driven demand in the first quarter of 2025 and the expected increase in Indonesia’s biodiesel blending mandate from B35 to B40. 

While the group expects its fresh fruit bunch (FFB) production to recover in 4QFY2024, it said production for FY2024 is still expected to be marginally lower year-on-year, mainly due to adverse weather conditions and low cropping trend that affected the first nine months of the year. Additionally, the group's ongoing replanting programme in its Malaysian estates led to a further decrease in production, it said.

For its property segment, the group said construction of the Jakarta Premium Outlets is progressing as scheduled, with operations expected to commence in the first half of 2025.

Outlook of the downstream manufacturing segment, meanwhile, is expected to remain challenging, given stiff competition from its Indonesian counterparts following recent changes in Indonesian export levies and overcapacity of refineries in Indonesia. This challenge is further compounded by the limited demand for palm-based biodiesel in export markets, it added. 

Shares of Genting Plantations dipped one sen or 0.18% to RM5.50 on Wednesday, valuing the group at RM4.94 billion.