KUCHING: Sarawak Plantation Bhd (SPB) has posted higher group pre-tax profit of about RM41.8 million in third quarter ended September 30, 2024 (3Q2024) against RM36.5 million in 3Q2023 despite a sharp drop in group revenue to RM149.1 million from RM172.7 million.
The increased profit was mainly resulted from a higher gain on fair value changes in biological assets of RM9.3 million against RM1.2 million recorded in 3Q2023. Group net profit rose to about RM31.1 million from RM27.1 million in 3Q2023.
The company’s earnings per share improved to 11.13 sen from 9.72 sen, and the company has declared an interim dividend of 15 sen per share as compared to 5 sen per share in 3Q2023.
On the operational level, group operating profit in 3Q2024 fell to RM32.5 million (3Q2023: RM35.3 million) due to the effect of lower sales volume of crude palm oil (CPO) and palm kernel (PK) despite their higher realised average selling prices in the current quarter under review, said SPB in explanatory notes to its financial results.
The group’s oil palm operation, which comprise estate and mill operations, contributed 99.8 per cent to group revenue of RM149.1 million in the current quarter. Estate operation recorded a segment revenue and segment profit of RM71.8 million and RM28 million respectively whereas mill operations registered segment revenue and profit of RM133.9 million and RM6.2 million respectively.
Revenue of the oil palm operation fell by RM23.6 million to RM148.8 million (3Q2023: RM172.4 million), principally attributable to the lower sales volume of CPO and PK by 20.5 per cent and 24.1 per cent respectively despite higher realised average selling prices of CPO and PK by five per cent and 27.9 per cent respectively during the current quarter.
As compared to the immediate preceding quarter (2Q2024), SPB performed better in the current quarter. Group operating profit surged to RM32.5 million in 3Q2024 (2Q2024: 25.5 million) due to the effect of higher sales volume of CPO and PK by approximately 11.5 per cent and 13.7 per cent respectively.
On a nine-month period in 2024 (9m2024), SPB group delivered much improved earnings, with group net profits climbed to RM75.84 million (9m2023: RM55.71 million) or an increase of RM20.1 million despite fall in revenue to RM407.9 million (RM411.5 million).
“The group’s operating profit before tax was RM73.5 million for the current financial period compared to operating profit before tax of RM67.6 million for the corresponding period of the preceding year. The increase in operating profit was principally due to the effect of higher realised average selling prices despite lower sales volume of CPO and PK during the current financial period.
“The group recorded a profit before tax of RM102.6 million for the current financial period as compared to a profit before tax of RM74.9 million in the corresponding period of the preceding year in line with the increase in operating profit for the current financial year, coupled with higher gain on fair value change in biological assets of RM29.1 million against RM7.3 million in the corresponding period of the preceding year,” said SPB.
In 9m2024, SPB’s estate operations generated revenue of RM181.8 million and profit of RM61 million whereas the mill operations recorded revenue of RM372.3 million and profit of RM17.2 million.
“Revenue of the oil palm operations decreased by RM3.6 million to RM407.2 million in the current financial period compared with RM410.8 million reported in the corresponding period of the preceding year.
“The decrease was principally attributed to the effect of lower sales volume of CPO and PK despite higher realised average selling price of CPO and PK during the current financial period. Sales volumes of CPO and PK decreased by approximately 5.7% and 8.9% respectively and average selling prices of CPO and PK had increased approximately by 3.5% and 18.8% respectively for the current financial period,” said the company.
On prospects for the current financial year ending December 31, 2024, SPB said CPO price recently surged to its highest level since July 2022, and currently has exceeded RM5,000 per tonne.
“The anticipated tight supply of vegetable oils and rising demand for palm oil will contribute to a favourable price outlook.
“The group remains committed to prioritise replanting for sustainable yield and production, and focus on achieving a reasonable level of production and cost effectiveness. Barring any unforeseen circumstances and subject to a sustainable CPO price, the board of directors anticipates to achieve a satisfactory performance for the current financial year,” added the Miri-based company.
