• Improved Net Profit of RM468 million
• Higher earnings from both Upstream and Sime Darby Oils
   

Kuala Lumpur, 22 May 2020 – For the first quarter of its financial year ending 31 December 2020 (Q1 FY2020), Sime Darby Plantation (SD Plantation) Group recorded an unaudited net profit of RM394 million from its continuing operations, compared to RM90 million in the corresponding period of the previous year. The stronger performance was attributable to higher contributions from both Upstream and Sime Darby Oils (Downstream) operations and lower finance costs.

The Group posted a recurring profit before interest and tax (PBIT) of RM380 million compared to RM196 million in the corresponding quarter of the previous year. It also registered a non-recurring PBIT of RM262 million derived from land sales in line with the asset monetisation plan undertaken by the Group.

The Group, accordingly, posted a net profit of RM468 million in comparison with RM74 million recorded in the corresponding quarter of the previous year.

“With our continuous drive to improve operational efficiencies and reduce costs, Sime Darby Plantation has been able to capitalise on the industry’s brief respite from low CPO and PK prices to record satisfactory results for Q1 FY2020. However, the Group remains cognisant that it will continue to face a challenging environment as countries around the world grapple with the spread of the COVID-19 virus and manage the economic repercussions of the pandemic,” said Tan Sri Dato' A. Ghani Othman, SD Plantation’s Chairman.

“Whilst the Group will not be insulated from the impact of this global crisis, we are fortunate to be operating in an industry that provides essential products to the world. As a key ingredient for both food and non-food products, we are reassured that the demand for palm oil will remain intact in the long term. In addition, we believe our focus on value creation strategy and prudent cost management will continue to place our operations and finances in a satisfactory position to weather the challenges ahead,” he added.

According to Mohamad Helmy Othman Basha, SD Plantation’s Group Managing Director, SD Plantation is prepared to embrace a “New Normal” in mitigating the impact of the pandemic to the Group’s business. This includes implementing additional precautionary measures to ensure the health and safety of its people whilst striving to minimise potential disruption to its operations.

“We expect to face challenges due to disruptions in logistics and supply chain in the event of a prolonged global pandemic. The domino effect of the looming global recession eventually may spill over to the palm oil industry impacting the Group’s value chain as well as the global demand for palm oil. The Group has, thus, carried out a business assessment and implemented some mitigation plans to counter these threats,” said Mohamad Helmy.

“Sime Darby Plantation is committed in delivering value to our stakeholders which would entail improving operational excellence, deleveraging via asset monetisation of non-core and under-performing assets, cost rationalisation and the growth plan for Sime Darby Oils to create a more balanced profit contribution from our Upstream and Downstream businesses,” added Mohamad Helmy further.

With the outbreak of the COVID-19 virus, SD Plantation played its part to assist the brave efforts of front liners to contain the pandemic and save human lives. The Sime Darby Foundation or Yayasan Sime Darby (YSD) pledged over RM4.4 million to support efforts to address the immediate needs of individuals and communities impacted by the COVID-19 pandemic.

In addition to what we have channelled via YSD, Sime Darby Plantation has pledged an additional RM3 million as cash or in-kind contribution to various official disaster relief networks and hospitals that have been designated to deal with infected cases in Malaysia, Indonesia as well as Papua New Guinea and the Solomon Islands, where we have our main operations. We hope that our contribution would help to alleviate the burden of the less fortunate communities during this difficult time,” said Mohamad Helmy.

Outlook

The global economic upheaval sparked by the COVID-19 pandemic poses unprecedented challenges and uncertainties to the business environment. To contain the virus, most countries have enforced restricted movement measures resulting in disruptions both on the supply and demand of commodities. The restrictions have not yet had any material impact to the Group’s operations.

The Group has assessed the potential impact of COVID-19 on its operations and financial performance which included, amongst others, rising risks of customers deferring or defaulting on contracts, customer credit risks, and volatility from foreign exchange fluctuations. The outlook of the Group’s performance for the financial year ending 31 December 2020 will be impacted by volatility of CPO and PK prices and impediment to operations, should a prolonged or worsening pandemic continue to affect global business activities.

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APPENDIX 1
First Quarter Ended 31 March 2020 versus First Quarter Ended 31 March 2019 (Year-on-year (YoY) Comparison)

The Group’s continuing operations reported a PBIT of RM642 million in Q1 FY2020 against RM196 million in the corresponding period of the previous year. The higher recurring PBIT in the quarter under review was contributed by both Upstream and Downstream operations. The Group also registered a non-recurring PBIT of RM262 million in the current quarter, comprising gains on land disposal in Malaysia.

Upstream Operations

In Q1 FY2020, Upstream operations registered a PBIT of RM288 million compared to RM103 million in the corresponding quarter of the previous year, representing an increase of 180 percent. The improved performance was largely attributable to higher average CPO and PK prices realised which increased by 29 percent to RM2,605 per MT and by 25 percent to RM1,519 per MT, respectively, compared to the same quarter last year. The Group’s average oil extraction rate (OER) improved by 0.48 percent to 21.89 percent in the quarter under review. It also registered an unrealised gain of RM136 million arising from fair value of commodity hedges. The improved performance has compensated for the lower fresh fruit bunch (FFB) production which declined by 15 percent to 2.12 million MT in the current quarter under review.

Upstream Malaysia’s PBIT increased by 55 percent to RM175 million in the current quarter compared to RM113 million in the corresponding quarter of the previous year. The better performance was mainly due to higher average CPO and PK prices realised which improved by 25 percent to RM2,491 per MT and by 26 percent to RM1,667 per MT, respectively, in the quarter under review. However, Upstream Malaysia’s performance was partially offset by lower FFB production and OER.

Upstream Indonesia posted a PBIT of RM39 million in Q1 FY2020 compared to RM9 million in the corresponding quarter of the previous year. The improvement in this quarter was mainly driven by average CPO and PK prices realised which increased by 31 percent YoY to RM2,613 per MT and by 25 percent to RM1,246 per MT, respectively. The operations also recorded an improvement in OER by 0.95 percent to 22.93 percent which has compensated for its lower FFB production and unrealised foreign currency exchange loss of RM53 million on borrowings arising from the appreciation of USD against IDR in the current quarter.

Upstream PNG and Solomon Islands (SI) reported a PBIT of RM74 million in the quarter under review against a loss before interest and tax (LBIT) of RM19 million in the corresponding quarter of the previous year. The improvement was primarily driven by higher CPO price realised and OER, which increased by 37 percent to 2,828 per MT and by 0.88 percent to 22.40 percent, respectively.

Downstream Operations

Sime Darby Oils registered a PBIT of RM89 million in Q1 FY2020, representing a 5 percent increase compared to RM85 million in the corresponding quarter of the previous year. The improved performance, largely driven by differentiated businesses in Europe, was due to higher sales volume, better margins as well as fair value gains on commodity hedges recorded in the current quarter. This has compensated for the weaker performance from the Asia Pacific operations affected by the fair value loss on derivatives and lower demand for refined products, particularly from China and India. 

PONGO Alliance: Oil Palm Growers and Conservation Practitioners Collaborate for Orangutan Conservation Yayasan Sime Darby has channelled RM1.2 million for the programme to create a paradigm shift in traditional agriculture and conservation practices

KINABATANGAN, 23 June 2020 – An alliance of oil palm growers, businesses and conservation practitioners, called PONGO Alliance, is developing guidelines for best management practices (BMP) to support sustainable palm oil production that includes safe spaces for wild orangutans outside of protected areas.

With a vision to make resilient landscapes for wildlife and people a reality, PONGO Alliance uses an evidence-based approach, that has found some orangutans not only survived large-scale habitat loss in the 1980s and 1990s but adapted to a landscape of forest patches and oil palm plantation.

PONGO Alliance Kinabatangan project director Dr Felicity Oram said that measures can be put in place to support co-existence of the surviving wild orangutan population where only ten per cent of the half-million-hectare land area is forest.

“We need to better understand orangutan habitat needs in this altered landscape and work out how to facilitate human and orangutan co-existence in the long term. In practice, this means leaving wild orangutans wherever they are in the landscape and developing better ways to support the adaptions these animals have made thus far,” she added.

Under a two-year sponsorship agreement titled “Creation of a Human and Orangutan Coexistence Landscape in Kinabatangan”, Yayasan Sime Darby (YSD) has committed RM1.2million to enable the programme to conduct detailed information-gathering, engagement with various players, and develop best management practices.

The sponsorship is in line with YSD Environment pillar’s focus area of protecting and preserving vulnerable and endangered species; as well as the education and awareness focus area as it involves building awareness within oil palm plantation communities, environmental NGO’s, government agencies, and international communities.

YSD chief executive officer Dr Hjh Yatela Zainal Abidin noted that research has shown that female orangutans live and raise their young in forest fragments surrounded by oil palms, while the males travel long distances through oil palm plantations between these patches. “This project aims to find out in more detail what is going on in Kinabatangan, to the level of individual orangutans,” she said.

“We hope that this effort will also assist growers and NGOs alike to view and manage oil palm forest landscapes in favour of human-orangutan coexistence; government agencies to develop a new policy on orangutan management; and the international community to understand that such coexistence is possible in mixed landscapes such as those comprising oil palm plantations and forests,” she added.

Full partner companies involved in this paradigm shift that have holdings in the project engagement area include Sime Darby Plantation Berhad (SDP), which hosts the secretariat of PONGO Alliance; and Sabah based partner, Sawit Kinabalu, which has committed 3,757 hectares of its land area to conservation set-asides.

SDP’s group managing director, Mohamad Helmy Othman Basha said the initiative by PONGO Alliance aligns with SDP’s ambition to achieve a deforestation-free palm oil industry and the Company looks forward to implementing the BMP at its estates. “We are cognisant of the need and importance of safeguarding the habitats of endangered species and not only will continue to work with like-minded organisations such as YSD and our partners in the PONGO Alliance but encourage other plantation companies to come on board to achieve this goal,” said Helmy.

Helmy also noted that the project in collaboration with PONGO Alliance is a logical follow-up on of YSD’s 10-year collaboration with Sabah Forestry Department on the ‘Reforestation and rehabilitation of orangutan habitat in Northern Ulu Segama (presently known as Bukit Piton Forest Reserve)’ project. He explained that the RM25 million project, in which SDP provided its technical expertise and assistance, improved orangutan habitat by planting 1,448,822 trees within the previously highly degraded Forest Reserve and contributed economic benefits to the local community in the surrounding area.

More information on the initiatives of PONGO Alliance is available on www.pongoalliance.org 

• Higher CPO price lifted profits
• Labour shortage to have a major impact on crop production in 2H FY2020

Kuala Lumpur, 27 August 2020 – For the six months ended 30 June 2020, Sime Darby Plantation (SD Plantation) Group reported significantly improved year-on-year (YOY) results on the back of stronger crude palm oil (CPO) and palm kernel (PK) prices realised.

This helped mitigate the impact of the COVID-19 pandemic on the results of its downstream subsidiary, Sime Darby Oils (SDO). SDO’s bulk operations margins and demand for its packed products from the F&B sector, particularly in Europe were adversely affected by the lockdown measures enforced by countries worldwide.

Key Highlights

• 1H FY2020: Strong recurring PBIT of RM730 million and a non-recurring PBIT of RM459 million (from disposal of non-core and underperforming assets)
• Q2 FY2020: Higher FFB production Y-o-Y and improved contribution from its Papua New Guinea/Solomon Island (PNG/SI) sugar operations

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:
“We were able to mitigate the impact of various risks on different segments of our business partly because of our presence along the full spectrum of the palm oil value chain. This has allowed us to remain focused on the priorities that matter amid this challenging global environment – the health and safety of our employees and various stakeholders, as well as job protection and cash conservation.”

Group Managing Director, Mohamad Helmy Othman Basha, said:
“We expect demand to improve in the second half of this year as countries ease lockdown restrictions allowing businesses to replenish stocks. We anticipate prices to remain stable in the second half of the year given concerns about edible oil supplies due to a potential La Nina.”

The Group declared an interim dividend of 2.57 sen per share and a special interim dividend of 1.45 sen per share, which will be paid to shareholders on 26 November 2020.

OUTLOOK FOR 2H FY2020

• The worsening foreign labour shortage in Malaysia, subsequent to travel restrictions imposed to prevent the spread of COVID-19, is expected to impact crop production.
• To mitigate the labour shortage, the Group is actively exploring all avenues available, including recruiting local employees as well as enhancing mechanisation and digitalisation efforts.
• Barring any extreme weather abnormalities, the Group expects its full year FY2020 FFB production to remain relatively unchanged.
• The Group’s performance for the financial year ending 31 December 2020 will continue to be impacted by the economic uncertainties from a potential second wave of COVID-19 infections.

MARC has affirmed Sime Darby Plantation Berhad's (SD Plantation) corporate credit rating at AAA with a stable outlook. Concurrently, the rating agency has affirmed its AAIS rating on SD Plantation's Perpetual Subordinated Sukuk Programme (Perpetual Sukuk) of up to RM3.0 billion.

SD Plantation's sizeable, geographically-diversified and integrated palm oil operations remain key rating drivers. The rating also benefits from a one-notch uplift for implicit support from parent Permodalan Nasional Berhad, a government-linked investment company. SD Plantation's exposure to crude palm oil (CPO) price movement that leads to cash flow volatility remains a moderating factor. Given the group's commitment to spend an average of RM800 million p.a. on replanting, the decline in cash flow generation from lower CPO price in recent years has weighed on its ability to reduce its debt obligations from internally generated funds.

SD Plantation has instead relied on proceeds from land disposals to pare down its borrowings; following some delays, land parcel sales totalling RM438 million were completed by end-1H2020. SD Plantation's adjusted borrowings were lower at RM8.7 billion (1H2019: RM8.9 billion), translating to a debt-to-equity (DE) ratio of 0.55x (net DE: 0.51x). On completion of the full disposal of land parcels with the proceeds utilised to reduce borrowings, group leverage is expected to improve to about 0.52x.

For 1H2020, SD Plantation recorded a higher average CPO price of RM2,475/MT (1H2019: RM2,016/MT). Correspondingly cash flow from operations was substantially higher at RM1.2 billion (1H2019: RM594 million). Meanwhile, its fresh fruit bunch production has been on a declining trend, recording 4.59 million MT in 1H2020 (1H2019: 4.95 million MT) largely on adverse weather conditions in Malaysia, Papua New Guinea and Solomon Islands. Its oil extraction rate, however, has been steady at 21.58% and is targeted to achieve 23% by 2023. The improved extraction rate benefits from higher-yielding seedlings used in replanting and technological improvement at the mills. SD Plantation is currently replanting at least 4% of its plantations but at a higher rate for its Indonesian plantations, ranging from 5% to 7%, given their older age; about 27% of SD Plantation's total cultivated oil palm plantation of 583,766 ha are currently in the prime ages (from nine to 18 years) as at end-2019.

SD Plantation's downstream operations branded as Sime Darby Oils (SDO) accounted for about 15.5% of total operating profit of RM727 million in 1H2020. SDO was created to highlight the group's focus on specialty products, premium quality oils and other differentiated products that command higher margins and would boost the characteristically thin operating profit margins of its downstream operations of below 3%. As a fully certified sustainable palm oil (CSPO) producer, the group is in good stead to further penetrate the global fast-moving consumer goods industry.

Contacts:
Lim Wooi Loon, +603-2717 2943 / wooiloon@marc.com.my
Taufiq Kamal, +603-2717 2951 / taufiq@marc.com.my

Kuala Lumpur, 23 November 2020 – Sime Darby Plantation (SD Plantation) Group recorded improved year-on-year (YoY) results bolstered by higher crude palm oil (CPO) and palm kernel (PK) prices realised.

The Group’s downstream segment, Sime Darby Oils (SDO), tripled its profit before interest and tax (“PBIT”) to RM71 million in Q3 FY2020 versus RM24 million in the immediate preceding quarter, from improved performance particularly in Asia Pacific.

Key Highlights 

• 9M FY2020: Recurring PBIT increased threefold YoY from RM368 million to RM1,077 million. Higher non-recurring PBIT of RM444 million was largely made up of gains from assets disposals.
• Q3 FY2020: Higher realised prices and improved contribution from SDO compensated for the lower OER and FFB production.

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:
“Whilst we continue to monitor and address the impact of COVID-19 on our business, we are indeed encouraged to have recorded a higher year-on-year performance thus far. For the rest of the financial year, the Group will remain focused on delivering value to our stakeholders as we navigate through the current challenging environment. We will continue to prioritise the health and safety of our stakeholders, the job security of our employees, our commitment to sustainable practices, protection of human rights as well as our R&D and innovation initiatives.”

Group Managing Director, Mohamad Helmy Othman Basha, said:
“Despite the challenges posed by the pandemic on global markets, CPO prices continue to be supported in the second half of the year, whilst palm oil demand has improved and is expected to grow further in 2021. As a sector that provides essential products to the world, this industry is showing resilience amid global uncertainties. Given these challenging times, we urge more unemployed Malaysians to seize the job opportunities available in the palm oil industry today. As a measure to further mitigate the industry’s current labour shortage, we also hope the government will continue with its efforts to alleviate restrictions on foreign labour, whilst the Group continues to ramp up mechanisation and digitalisation efforts to increase productivity and reduce reliance on labour in the medium to long term.”

The Group’s financial performance for the financial year ending 31 December 2020 is expected to be better than last year.

Kuala Lumpur, 11 February 2021 – Sime Darby Plantation Berhad (SDP) refers to a recent news report headlined “Buyers shun major Malaysian palm oil producers after forced labour allegations”. As stated in the article, SDP’s major customers have expressed support and are working closely with us to better understand the substance of the allegations that have been made against us. Many of our customers have committed to sustainable sourcing and thus truly appreciate and understand our efforts to ensure our operations are managed well, sustainably and responsibly.

SDP remains committed to addressing the withhold release order (WRO) issued by the United States Customs and Border Protection (CBP). In the absence of useful information from the original complainant to assist us, we have already conducted internal assessments of our entire Malaysian operations. Our findings do not reveal any systemic issues in our operations. Nevertheless, as stated previously, we will also engage independent assessors to ensure that we leave no stone unturned in our quest to secure a completely safe and nurturing environment for all our workers, regardless of gender or nationality. Meanwhile, we have maintained regular engagements with all our customers to ensure they are updated and appraised of all developments.

• The Group declares a total dividend of 9.44 sen per share for FY2020

   

Kuala Lumpur, 18 February 2021 – For the Financial Year Ended 31 December 2020 (FY2020), Sime Darby Plantation Berhad (SD Plantation) recorded a turnaround in its financial performance with a net profit of RM1.2 billion as compared to a net loss of RM200 million in FY2019.

Both the Group’s Upstream and Downstream segments recorded better year-on-year (YoY) performances. The Group’s Upstream segment enjoyed higher crude palm oil (CPO) and palm kernel (PK) prices, while Sime Darby Oils (SDO), representing the Group’s Downstream segment, benefited from its on-going business transformation programme with improved margins and lower cost of production.

Key Highlights

• YE FY2020: Higher realised prices and stronger contribution from SDO compensated for the impact of the labour shortage in Malaysia and extreme weather (dry weather in 2019 and recent flooding due to the La Nina) on the Group’s FFB production.
• Q4 FY2020: The Group’s continuing operations registered improved recurring PBIT whilst its discontinued operations recorded an impairment loss in a joint venture amounting to RM236 million.

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said:

“The higher palm oil prices were a blessing for all industry players in what had been one of the most challenging years in recent history for the global economy. Sime Darby Plantation is encouraged with its overall significantly better financial performance in 2020 and the Group is hopeful that it will be able to carry this through in the current financial year. The positive news on the rollout of a number of vaccines globally, provides a glimmer of hope along the road to recovery. We are cognisant of the continuing devastating threat of the COVID-19 pandemic and will remain vigilant in mitigating the spread of the virus to safeguard the lives of our employees and ensure our business continuity.”

Group Managing Director, Mohamad Helmy Othman Basha, said:

“I am proud of the hard work of our employees who have stayed focused and dedicated in the face of the challenges of an extremely difficult year. Their unwavering commitment to drive operational excellence was crucial in ensuring the Group was able to navigate through the effects of extreme weather, the new norm of this pandemic as well as the current labour shortage in our operations.

Whilst the Group continues to mitigate these challenges in 2021, one of our immediate priorities is to allay the concerns of our stakeholders over the Withhold Release Order issued recently by the U.S. Customs and Border Protection. We are working with independent and credible organisations to address this matter expeditiously and keeping all our stakeholders abreast on our progress. As part of our commitment to continuous improvement, Sime Darby Plantation is determined to proactively identify any gaps that may exist in our operations and to safeguard the well-being and safety of all our employees, especially the most vulnerable among us.”

OUTLOOK FOR FY2021:

Given market forecasts of elevated CPO prices, the Group is cautiously optimistic that it will achieve a satisfactory overall performance this year. The Group will remain focused on its efforts to create more value for its stakeholders by continuously driving operational improvements throughout its operations and further improving the balance of profit contribution between its Upstream and Downstream segments in 2021.

DIVIDEND:

The Group has declared a final dividend of 5.42 sen per share, which together with the interim dividend of 2.57 sen per share, amounts to a single tier dividend of 7.99 sen per share for FY2020. In addition, the Group also declared a special interim dividend of 1.45 sen per share which was paid on 22 November 2020.

Total dividends declared in 2020 amounted to 9.44 sen per share compared to 1.00 sen per share in 2019.

Kuala Lumpur, 16 March 2021 - Sime Darby Plantation Berhad (SDP) refers to its press statement dated 11 March 2021 pertaining to a discovery application filed in the Eastern District of Virginia in the United States. The discovery application was predicated on SDP’s understanding that an investigation had commenced as a result of the complaint lodged by Duncan Jepson of Liberty Shared to the Securities Commission Malaysia (SC). It has since been clarified by the SC that there is no investigation into the complaint at present. Accordingly, SDP has now withdrawn the discovery application.

Kuala Lumpur, 19 March 2021– Sime Darby Plantation Berhad (SDP) and Malaysia Airlines Berhad (MAB) partnered to facilitate the journey home of 283 workers from India. The specially chartered Malaysia Airlines aircraft A330-200, MH8780 flight took off on 12 March to the Netaji Subhash Chandra Bose International Airport in Calcutta. This is the first charter flight to India in 2021 and marks the second time both Companies have joined forces to ensure the safe return of SDP’s foreign workers to their home countries. Malaysia Airlines was instrumental in providing ground arrangements, and facilitating the process with the Indian Embassy in Malaysia as well as relevant authorities. Meanwhile, the cost of the entire exercise was borne by SDP.

The Covid-19 pandemic, global travel restrictions and border closures had complicated the movement of foreign workers whose employment tenure with SDP have ended. Despite the challenges, since July 2020, SDP, with the help of several agencies including Malaysia Airlines, the Malaysian Immigration Department, various embassies and KLIA Authorities, have assisted a total of 1,739 foreign workers to return home.

Furthermore, SDP is also in the midst of preparing the journey back for an additional 670 workers within the next three months to Indonesia, India, Nepal, Bangladesh and Sri Lanka. In the meantime, foreign workers whose permits have expired will continue to live on SDP’s estates with free housing and subsidised utilities.

“Malaysia Airlines is committed to playing its role in making sure families are reunited in this challenging and uncertain times. Over this past year, we continue to serve the nation and our network by maintaining domestic and international connectivity mostly to facilitate essential movements. We also assist government and corporate agencies to reach countries that are not on the commercial flight network through our charter service. We are glad to be of further assistance by providing a rescue flight for SDP’s workers for the second consecutive year, which we believe reflects their confidence in our services. The operation to Calcutta also marks another new city Malaysia Airlines is flying to during this pandemic where few commercial flights are available,” said Captain Izham Ismail, Group Chief Executive Officer of Malaysia Aviation Group (MAG), the parent company for MAB.

Malaysia Airlines and SDP had taken all necessary precautions and adhered to guidelines set by the Ministry of Health, Malaysia (MOH) and the World Health Organisation (WHO) at all times. All the foreign workers underwent the compulsory COVID-19 tests, and the authorities were notified of the results within 24 hours before departure.

Malaysia Airlines had also ensured that the passengers and staff onboard the flight were equipped with Personal Protective Equipment (PPE) and that standard hygiene practices were observed, including washing hands and utilising hand sanitisers periodically throughout the journey.

SDP Group Managing Director Mohamad Helmy Othman Basha said, “We are fortunate to work with a like-minded partner such as Malaysia Airlines, who shares the same commitment to ensure the success of this mission. Our foreign workers are an invaluable part of our workforce and they deserve our very best effort to reunite them with their families safely. We aim to help all our people who are waiting to go back home during these times.”

As an extra token of appreciation, SDP also arranged for 16 of these workers who have been with the Company for over 10 years to travel on business class. SDP had also provided RM300 for domestic travel allowance to 88 of workers who were bound to travel back to various regions upon arrival in Calcutta. 

• Higher PBIT driven by favourable CPO prices, increased production and improved Downstream performance

Kuala Lumpur, 20 May 2021 – Sime Darby Plantation Berhad (SD Plantation) posted a net profit of RM562 million for 1QFY2021, an improvement of 20% as compared to the previous corresponding quarter.

The Group’s Upstream performance improved to a profit before interest and tax (PBIT) of RM543 million (1QFY2020: RM288 million) on the back of sustained higher crude palm oil (CPO) and palm kernel (PK) prices as well as increased Fresh Fruit Bunch (FFB) production. In the same period, the Group’s Downstream operations, Sime Darby Oils, recorded a 20% increase in PBIT totalling RM107 million, primarily attributable to improved performance in the Asia Pacific region.

Key Highlights

• The higher realised prices and increase in FFB production compensated for the lower OER, which was primarily the result of the acute labour shortage in Malaysia and adverse weather conditions in Indonesia.
• The Group's recurring PBIT was improved by 75% year-on-year. However, its non-recurring PBIT declined by RM138 million due to reduced disposals of non-core assets.

Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr Haji Megat Khas said,

“Whilst the sustained high CPO price has certainly been a boon for the industry, I am also encouraged by our operational performance despite the challenges presented by the COVID-19 pandemic. With this strong showing in the first quarter, we are on-track to achieve our financial targets for the rest of FY2021.

“With the current spike in infection cases in certain parts of the world, including Malaysia, we are cognisant of the continuing risks and threats from the pandemic. The Group will remain vigilant in safeguarding our operations and employees, even as the current global roll out of vaccines progresses.”

Group Managing Director, Mohamad Helmy Othman Basha said,

“We saw an improvement in the results of Sime Darby Oils in the Asia Pacific, which benefited from the market price uptrend. However, demand has yet to fully recover from the impact of COVID-19.

”The Group is working with several parties to address the withhold release order that was imposed by the US Customs and Border Protection at the end of 2020. The Group had appointed a third-party assessor to undertake a comprehensive review of all its Malaysian operations. This exercise is expected to be completed in June.

“We are committed to protecting the rights and safety of our workforce regardless of race, nationality or gender. As such, we are focused on ensuring safe working and living conditions for all our employees.”

OUTLOOK FOR REMAINING FY2021:

CPO price in the first quarter was driven primarily by record high prices of substitute oils and is expected to soften in the second half of 2021 as production increases. On the operational front, the Group anticipates improved production this year whilst sustaining its efforts to increase efficiency and productivity through digitalisation, automation and mechanisation. Barring any unforeseen circumstances, SD Plantation expects its performance for the financial year ending 31 December 2021 to be promising.