Sime Darby Plantation Q2 net profit up 34.4% on improved FFB production

PETALING JAYA: Sime Darby Plantation Bhd's second quarter net profit was up 34.4% on improved fresh fruit bunches (FFB) production, which mitigated the impact of lower average crude palm oil (CPO) price.
The group’s FFB production improved by 2.0% from 2.72 million metric tonnes (MT) to 2.76 million MT in the current quarter, softening the impact from the 6.0% reduction in the average CPO price realised at RM2,654 per MT in the quarter under review.
Sime Darby Plantation made a net profit of RM429.0 million for the quarter under review, compared with RM319.0 million for the quarter ended Dec 31, 2016.
Revenue for the quarter was up 4.0% to RM4.1 billion, from RM4.0 billion for the same quarter ended Dec 31, 2016.
The group announced an interim dividend of 6.3 sen for the quarter, bringing total payout for the six month period to 21.3 sen.
Barring any extreme weather abnormalities, the group expects the full year FFB production to improve from the previous financial year, as the El Niño effect tapers off in line with increased FFB output in the oil palm industry.
The group said while this is expected to continue putting downward pressure on CPO prices, the recent suspension on CPO export taxes by the Malaysian government and the upcoming festive periods will lend support to demand.
Other factors such as the movement of crude oil prices, the implementation of biodiesel mandates particularly in Indonesia, the performance of the ringgit against foreign currencies, and competition from other edible oils are also likely to influence the CPO market price.Overall, the group expects its operating performance for FY2018 to be satisfactory.
For the six month period ended Dec 31, 2017, the group saw net profit more than double to RM1.4 billion, compared with RM470 million for the same period in 2016.
Revenue for the period under review was up RM7.6 billion, compared with RM6.7 billion for the same period in 2016.
The group's share price was up one sen to RM5.54 with some 848,800 shares changing hands as at the end of morning trade.