KUALA LUMPUR: Sime Darby Plantation Bhd saw its earnings surge by 1,300% to RM378mil in the second quarter ended June 30,2020 from RM27mil a year ago, boosted by stronger crude palm oil (CPO) and palm kernel (PK) prices realised.

The plantation giant said its revenue increased by 12.2% to RM3.21bil from RM2.86bil. Earnings per share were 5.50 sen compared with 0.4 sen previously.

It rewarded shareholders with a dividend of 4.02 sen a share. This comprised an interim dividend of 2.57 sen per share and a special interim dividend of 1.45 sen per share, which would be paid to shareholders on Nov 26, it said in a statement.

Sime Plantation said that in the second quarter, CPO price realised rose by 17% to RM2,361 per tonne from RM2,021 a year ago. Fresh fruit bunches (FFB) production rose by 3% to 2.47 million tonnes from 2.41 million tonnes. Oil extraction rate also increased by 0.04% to 21.29% from 21.25%.

For the first half, it posted a net profit of RM846mil, a surge of 738% from the RM101mil achieved a year ago. Its revenue increased by 7% to RM6.26bil from RM5.86bil. The stronger first-half results were underpinned by by the strong CPO and PK prices.

“This helped mitigate the impact of the Covid-19 pandemic on the results of its downstream subsidiary, Sime Darby Oils (SDO).

“SDO’s bulk operations margins and demand for its packed products from the food and beverage sector, particularly in Europe, were adversely affected by the lockdown measures enforced by countries worldwide, ” it said.

Chairman Tan Sri Megat Najmuddin Megat Khas said the group was able to mitigate the impact of various risks on the different segments of its business partly because of its presence along the full spectrum of the palm oil value chain.

“This has allowed us to remain focused on the priorities that matter amid this challenging global environment – the health and safety of our employees and various stakeholders, as well as job protection and cash conservation, ” he said.

Group managing director Mohamad Helmy Othman Basha said he expected demand to improve in the second half of this year as countries eased lockdown restrictions, allowing businesses to replenish stocks.

“We anticipate prices to remain stable in the second half of the year, given concerns about edible oil supplies due to a potential La Nina, ” he said.

On the outlook for the second half, Sime Plantation expressed concerns about worsening foreign labour shortage in Malaysia, subsequent to travel restrictions imposed to prevent the spread of Covid-19. It expected the travel curbs to impact crop production.

However, to mitigate the labour shortage, Sime Plantation is looking to recruit local employees as well as enhancing mechanisation and digitalisation efforts.

It also said barring any extreme weather abnormalities, the group expected its FFB production for full year 2020 to remain relatively unchanged.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here