Sime Darby Plantation Berhad registered a Profit Before Interest and Tax of RM303 million in the first quarter of its financial year ending 31 December 2023 (1Q FY2023), a decrease from the RM1,060 million PBIT recorded in 1Q 2022,
Nett profit however declined by 90% to RM69 million as compared to RM718 million.
The decline in profits it said was mainly attributable to lower year-on-year average realised crude palm oil (CPO) and palm kernel prices, lower fresh fruit bunch (FFB) production as well as higher finance costs with increased benchmark interest rates. Realised CPO prices in 1Q FY2023 averaged RM3,887 per metric tonne (MT), a YoY decline of 13% compared to RM4,465 per MT the year before, whilst average realised PK prices declined significantly by 56% YoY to RM1,794 per MT from RM4,105 per MT in the previous period.
The Group’s overall FFB production declined by 5% YoY as its Malaysian upstream operations continued to be impacted by the lingering effects from the prolonged acute labour shortage resulting in a 11% decline whilst both its operations in Indonesia and Papua New Guinea recorded a 1% growth.
Its downstream operations, Sime Darby Oils (SDO), experienced a challenging quarter registering a PBIT of RM68 million, as compared to RM161 million in the previous year. SDO recorded lower sales volumes and margins in its Asia Pacific bulk and
differentiated operations. However, its European operations recorded improved performance in both sales volumes and margins
The Group’s 1Q FY2023 profits declined in its recurring segment and there were no profits from non-recurring transactions in the period.
Commenting on the performance, Chairman, Tan Sri Dato’ Seri Haji Megat Najmuddin said “Having successfully navigated a multitude of challenges over the last few years, I am confident that the Group will address any lingering issues swiftly. We will build on our strengths and forge ahead to sustain our market leadership, delivering value to our stakeholders.” However, Group Managing Director, Mohamad Helmy Othman Basha was pragmatic “Our performance was affected by the sharp decline in average CPO prices and the impact of the prolonged labour shortage in Malaysia, which is only now in the nascent stages of recovery.
As for outlook, SDP says 2023 remains challenging.
