Sime Plantation’s net profit triples to RM1.21bil in 3Q as upstream ops recovers
Sime Plantation's net profit triples to RM1.21bil in 3Q as upstream ops recovers
KUALA LUMPUR: Sime Darby Plantation Bhd is looking to end 2023 with a satisfactory financial performance as it turned in a robust set of earnings for its third quarter of the year.
Group managing director Datuk Mohamad Helmy Othman Basha said the group is seeing the results of months of rehabilitation work with an increased workforce successfully turning around its upstream Malaysia operations in 3QFY23.
"I’m pleased to report that our labour shortage crisis is now behind us. We remain steadfast in our focus to reduce long-term dependence on manual labour through mechanisation, automation and digitalisation," he said in a statement.
Meanwhile, chairman Tan Sri Nik Norzrul Thani Nik Hassan Thani said the group is back on track following a challenging start to the year and is looking towards unlocking more value from its strategic collaborations with China and India.
In 3QFY23, the plantations group reported a net profit of RM1.21bil, which was slightly more than three times the net profit of RM396mil recorded in the same quarter a year earlier.
Basic earnings per share for the quarter rose to 17.5 sen from 5.7 sen in the comparative quarter.
Revenue, meanwhile, was lower at RM4.77bil compared to RM5.39bil in the same 2022 quarter.
According to Sime Plantation, the group's upstream operations registered an impressive improvement in 3QFY23, led by the strong recovery of the Malaysian operations.
"The Malaysian operations saw a 38% year-on-year (y-o-y) increase in fresh fruit bunch (FFB) production, due to having more harvesters and intensive rehabilitation efforts.
"The Malaysian production volume achieved in 3QFY23 was higher by 43% quarter-on-quarter and also represented 43% of the total Malaysian production for 9M FY2023," it said in a statement.
The resulting 14% year-on-year increase in overall FFB production mitigated the impact of lower average realised crude palm oil (CPO) and palm kernel (PK), it added.
Meanwhile, the group's downstream operations, Sime Darby Oils, recorded a lower profit before interest and tax (PBIT) of RM225mil in 3FY23 due to lower margins and volume demand in its Asia Pacific operations, although this was partially mitigated by strong results in its European operations.
For the nine months period to Sept 30, 2023, Sime Plantation reported a lower net profit of RM1.66bil compared to RM1.93bil, while revenue was down to RM13.15bil from RM15.36bil in 9MFY22.
The group noted that it recorded a non-recurring PBIT of RM876mil during the period, comprising a disposal of interests in two Indonesian subsidiaries for a total gain of RM278mil, a gain from land sale in Malaysia of RM607mil and an impairment charge of RM9mil in respect to the group's Malaysian rubber plantation.
