Sime Darby Plantation Berhad registered a net profit of RM2.49 billion for the Financial Year Ended 31 December 2022 (FY2022), a year-on-year (YoY) increase of 10%.
This strong showing was registered on the back of a record performance by the Group’s downstream operations, Sime Darby Oils (SDO), which achieved a profit before interest and tax (PBIT) of RM859 million in FY2022, 61% higher than the previous year. Meanwhile, higher average realised crude palm oil (CPO) price, a 20% increase on the previous year, mitigated the 10% decline in fresh fruit bunch (FFB) production. The Group’s FFB production in FY2022 was particularly challenged in Malaysia, the impact of which was partially compensated by better production in its operations in Indonesia as well as Papua
New Guinea and the Solomon Islands. The Group anticipates that with the expected arrival of a full complement of workers by the end of June 2023, its Malaysian operations will see improved performance in FY2023.
For the quarter ended 31 December 2022 (4Q FY2022), the Group’s net profit increased by 20% to RM562 million, despite a 2% and a 4% decline in FFB production and realised CPO prices respectively as compared to the previous year’s corresponding period. During the period, SDO was also impacted by lower overall sales volumes as well as lower margins
in its European operations.
FY2022: Further to a solid performance by SDO, the Group’s profits were also bolstered by higher contributions from the Group’s other operations, as well as higher non-recurring profits of RM291 million, arising from gains on the disposal of land in Malaysia as well as the “earn out” settlement for the disposal of a former subsidiary in Liberia.
CPO prices are expected to hold at current levels for the first quarter of 2023, on the back of continued strong demand. This is due, in part, to the considerable price advantage when compared to alternative oils and supply concerns resulting from Indonesia’s anticipated higher biodiesel mandate as well as tighter export policies.
With the arrival of more foreign workers into Malaysia, particularly harvesters, the Group expects its FFB production in Malaysia to improve in 2023 after a challenging two years. Barring any unforeseen circumstances, the Group expects to perform satisfactorily in FY2023.
The Group has declared a final dividend of 6.04 sen per share, which together with the interim dividend of 10.00 sen per share, amounts to a total single tier dividend of 16.04 sen per share for FY2022.
