by PRIYA VASU / graphic by MZUKRI MOHAMAD
SIME Darby Plantation Berhad posted a net profit of RM562 mil for 1QFY2021, an improvement of 20% as compared to the previous corresponding quarter.
In a filing to Bursa Malaysia the company noted its revenue was up by 20% to RM3.67 bil from RM3.04 bil posted in the same period last year.
The strong performance driven by the group’s upstream performance improved to a profit before interest and tax (PBIT) of RM543 mil (1QFY2020: RM288 mil) 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.
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 improved by 75% year-on-year. However, its non-recurring PBIT declined by RM138 million due to reduced disposals of non-core assets.
“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,” said Group MD Mohamad Helmy Othman Basha.
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.