Sime Darby Plantation posts RM27m net profit in Q2

KUALA LUMPUR: Sime Darby Plantation Bhd saw a net profit of RM27 million for the second quarter ended June 30, 2019, while revenue stood at RM2.88 billion amid weak crude palm oil (CPO) and palm kernel (PK) prices.

There is no comparative for the quarter and half-year period. Due to the change in the financial year end from June 30 to Dec 31, the unaudited condensed consolidated statement of profit or loss for the current quarter and half-year, being the second quarter of the financial year ending Dec 31, 2019 is not comparable with that of the second quarter of the previous financial year ended June 30, 2018.

However, for analysis, its Q2 net profit was 10% lower against RM30 million in the corresponding quarter of the previous year, affected by weak CPO and PK prices.

The average CPO price realised declined by 15% year-on-year (yoy) from RM2,379 per MT to RM2,021 per MT whilst the average PK price realised was lower by 39% yoy from RM1,682 per MT to RM1,020 per MT.

The group’s FFB production of 2.43 million MT in Q2 FY2019 was comparable to the same quarter of 2018 of 2.44 million MT. It also recorded an improvement in OER from 21.11% to 21.27%. Nevertheless, the group’s earnings continued to be negatively impacted by weaker CPO and PK realised prices.

“Low commodity prices continue to impact the industry as well as Sime Darby Plantation’s earnings. We have aggressively put in place measures that would help us navigate through the current market conditions. These include the strategy to balance the profit contribution from both our upstream and downstream segments as a mid-to-long term solution,” said group managing director Mohamad Helmy Othman Basha in a statement.

It recorded a non-recurring profit of RM9 million arising from the disposal of the group’s entire shareholding in a wholly-owned subsidiary, PT Mitra Austral Sejahtera (PT MAS), as compared to a non-recurring loss of RM283 million mainly due to impairment charges in the corresponding quarter of the previous year. The disposal of PT MAS, which was a loss-making subsidiary, is positive to the group and aligns with the group’s strategy to monetise non-performing assets.

For the six months period, it reported a net profit of RM101 million, representing a 64% decrease against the corresponding period of the previous year due to the adverse impact of weaker CPO and PK prices realised, which declined by 16% yoy from RM2,414 per MT to RM2,016 per MT and by 41% yoy from RM1,897 per MT to RM1,116 per MT respectively.

Revenue stood at RM5.88 billion.

source https://www.thesundaily.my/business/sime-darby-plantation-posts-rm27m-net-profit-in-q2-CI1318510