Sime Darby Plantation Bhd (SDP) achieved a net profit of RM718 million for the first quarter ending March 31, 2022 from a net profit of RM562 million previously. Revenue also rose to RM4.38 billion from RM3.673 billion previously.
In a Bursa Filing, it attributes its better performance due to higher CPO and PK prices which increased by 40% and 84%, respectively. This compensated for the 13% decline in fresh fruit bunch (“FFB”) production during the quarter.
The company said its profits from the downstream sector increased mainly due to higher margins generated by the Asia Pacific bulk operations which benefited from RSPO premiums on CPKO sales, mitigating lower sales volumes and margins in its Asia Pacific differentiated and European operations.
In a Statement, its chairman Tan Sri Dato’ Seri Haji Megat Najmuddin bin Datuk Seri Dr. Haji Megat Khas said: The Group has started the financial year with a solid set of results on the back of continuing high commodity prices caused by ongoing supply chain disruptions.
He said that as palm oil plays a crucial role in fulfilling the demand for vegetable oils in the global market, I am confident that SDP will be able to leverage on current opportunities and continue to deliver an encouraging performance in 2022.
On the outlook for Fy2022, the group believes that while palm oil demand may be impacted by current elevated prices, this will be mitigated by the tight supply and availability of alternative vegetable oils as well as supply chain disruptions caused by the ongoing Russia-Ukraine conflict.
The Group anticipates lower overall FFB production against FY2021, as the intake of new foreign workers for the plantation industry is only expected to arrive in the second half of the year. Barring any unforeseen circumstances, the Group expects encouraging performance for the financial year ending 31 December 2022.