MHC Plantations’ net profit rises 80% in 2Q22

by SHAFIQQUL ALIFF / pic mhc.com.my

MHC Plantations Bhd’s net profits soared 80% to RM16.31 million in the second quarter of 2022 (2Q22) which ended on June 30, 2022, compared to RM9.07 million recorded last year.

The group recorded a revenue of RM180.79 million for the quarter compared to RM139.01 million in the corresponding quarter last year, mainly due to higher average selling prices of crude palm oil (CPO) (59%), palm kernel (PK) (39%), fresh fruit bunches (FFB) (57%) and empty fruit bunches oil (EFB Oil) by 34% respectively.

MHC said in an exchange filing yesterday that the increase in plantation segment profit by RM6.07 million (40%) from RM15.06 million to RM21.13 million was mainly due to a substantial increase in average FFB selling price by 57% despite a lower FFB production by 13%.

As for the oil mill segment, the increase of the profit by RM3.48 million (58%) from RM5.98 million to RM9.46 million was mainly due to higher selling prices of CPO and PK by 59% and 39% respectively, and a favourable OER margin.

Meanwhile, the increase in power plant segment profit by RM2.16 million (94%) from RM2.29 million to RM4.45 million was mainly due to increases in the average selling price of EFB oil (34%), EFB oil sales volume (3%), and power export (29%).

For the six months ended June 30, MHC’s net profit also soars by 74% to RM27.78 million compared to the previous at RM15.94 million while its revenue rose by 42% to RM334.14 million compared to revenue of RM235.19 million in the preceding year corresponding period.

Moving forward, the group expects CPO prices to remain firm in the second half of 2022 given supply tightness amid the prolonged Russia-Ukraine conflict.

“The group will continue to face challenges from the increase in production costs and acute shortage of foreign labour in the palm oil industry.

“As such, the group will continue to improve its operating efficiency and productivity, particularly through mechanisation and the board is confident that, barring any unforeseen circumstances, the group will continue to perform satisfactorily for the financial year 2022,” it stated.