KUALA LUMPUR (May 24): Sime Darby Plantation Bhd posted RM69 million net profit for the first quarter ended March 31, 2023 (1QFY2023), a 90.4% drop from RM718 million recorded a year earlier.
Earnings per share was one sen, lower than 10.4 sen in 1QFY2022. Revenue decreased 7.12% to RM4.07 billion from RM4.38 billion, the plantation group announced to Bursa Malaysia on Wednesday (May 24).
Sime Darby Plantation said the lower earnings for the quarter under underview was mainly attributable to lower average realised crude palm oil (CPO) and palm kernel (PK) prices, lower fresh fruit bunches (FFB) production as well as higher finance costs with increased benchmark interest rates.
Realised CPO prices averaged RM3,887 per tonne, down 13% from RM4,465 per tonne the year before, while average realised PK prices declined 56% to RM1,794 per tonne from RM4,105 per tonne.
According to the group, its overall FFB production was down by 5%, dragged by its Malaysian upstream operations which continued to be impacted by the lingering effects from the prolonged acute labour shortage.
The group also noted that its downstream operations, Sime Darby Oils, experienced a challenging quarter, with RM68 million profit before interest and tax of RM68 million, versus RM161 million in 1QFY2022 due to lower sales volumes and margins in its Asia-Pacific bulk and differentiated operations.
No dividend was declared for the quarter under review.
Although FY2023 performance is expected to remain challenging, Sime Darby Plantation said it expects to improve its FFB production with the easing of labour shortage in the country, and is optimistic of achieving improved productivity this year.
“We are thus giving the highest priority to the factors within our control, namely the rehabilitation of upstream Malaysia and the bold initiative to reduce dependence on manual and foreign workers through the mechanisation, automation and digitalisation of our estates,” said its managing director Mohamad Helmy Othman Basha in a statement.
“These efforts will be the foundation of more sustainable, productive, and efficient operations for us in the future, as we continue to recover our productivity and reinvent our plantation operations this financial year,” he added.
At Wednesday’s noon break, Sime Darby Plantation’s share price finished down one sen or 0.22% to RM4.47, giving it a market capitalisation of RM30.91 billion.
