KUALA LUMPUR (Feb 26): Hap Seng Plantations Holdings Bhd’s (KL:HSPLANT) net profit jumped four times in its fourth quarter ended Dec 31, 2024 (4QFY2024) on higher selling prices and sales volume in crude palm oil (CPO).

Quarterly net profit was RM85.01 million, up from RM20.69 million a year ago, which included a fair value adjustment gains of biological assets amounting to RM24.4 million versus a loss of RM21.1 million in 4QFY2023.

The plantation company declared a second interim dividend of 11 sen per share — payable on March 27 — bringing its total dividend for FY2024 to 12.5 sen, up from 6.8 sen in FY2023.

Revenue for the quarter increased 33.7% to RM223.37 million from RM174.56 million, as the group achieved higher average selling prices for both its CPO and palm kernel (PK), which was 26.1% and 66.3% higher respectively compared to a year earlier.

In terms of sales volume, CPO was 4% higher while PK was 7% lower, affected by lower kernel extraction rate.

For FY2024, the group’s net profit more than doubled to RM204.64 million from RM91.37 million, while its revenue rose 12.7% to RM752.45 million from RM667.84 million in FY2023.

In terms of prospects, Hap Seng Plantations noted that the implementation of Indonesia’s B40 biodiesel mandate and the increase of Indonesia's export levy on CPO to 10% from 7.5% will constrain global palm oil supply and augurs well for the global palm oil market.

This will also benefit Malaysia’s palm oil exports, which will be more price competitive to Indonesian palm oil.

While the increase in minimum wage for foreign workers will increase the group’s cost of production, the group said this will be partly offset by an increase in the threshold price for windfall tax levy from RM3,500 to RM3,650 for Sabah.

“The group will continue to put concerted efforts to improve the overall efficiencies in operations to mitigate the higher cost of production while practising good plantation husbandry to further improve yield and extraction rates,” it added.

Shares of Hap Seng Plantations closed unchanged at RM1.94 on Wednesday, giving it a market capitalisation of RM1.55 billion. Year-to-date, the stock has fallen 2.5%.