KUCHING: Sarawak Plantation Bhd (SPB) has reported a marginal increase in its group net profit to RM30 million in second quarter ended June 30, 2022 (Q22022) from about RM29.4 million in Q22021 on higher group revenue.
Group revenue surged to RM207.1 million from RM192.6 million or up by RM14.5 million during the same period. The company’s earnings per share rose slightly to 10.75 sen from 10.53 sen previously.
In the current quarter under review, SPB said its group operating profit before tax jumped to RM52.8 million (Q22021: RM32.4 million) due to the effect of higher realised average selling prices despite lower sales volume of crude palm oil (CPO) and palm kernel (PK) .
The oil palm operations, which comprise estate and mill operations, recorded revenue of RM99.3 million or 99.9 percent of group revenue and segment profit of RM55.2 million. The mill operations posted revenue of RM186 million and segment profit of RM0.9 million.
SPB attributed the higher revenue of the oil palm operations to higher realised selling prices of CPO by 53.9 percent and PK by 34.9 percent respectively during the current interim quarter.
The increase in revenue drove the operating profit sharply higher to RM52.9 million (Q22021: RM32.5 million).
The Q22022 operating tax was a significant improvement from RM39 million in the preceding quarter (Q12022) as the realised average selling price of CPO climbed 9.4 percent while the sales volume of CPO and PK expanded 5.6 percent and 7.2 percent respectively.
However, the Q22022 group pre-tax profit fell RM14.5 million to RM42.1 million from RM56.6 million previously principally due to a loss in fair value changes of biological assets of RM10.7 million compared to a gain of RM17.6 million in Q12022, SPB said in explanatory notes to its financials.
Over a six-month period in 2022 (6M2022), SPB group net profit surged to RM73.3 million (6M2021:RM53.1 million), boosted by sharply higher group revenue of RM391 million (RM338.1 million).
The company attributed the sound performance to the higher realised average selling prices of CPO and PK despite their lower sales volumes.
SPB group owns 16 oil palm estates in Sarawak, with a total landbank of 43,481 hectares (plantable area of 35,577 hectares) and 412 hectares (planted 402 hectares) under a joint venture development with a statutory body. The group also owns two palm oil mills.
On prospects for the current financial year, SPB said CPO price experienced a sharp decline following the lifting of palm oil export ban by Indonesia, the world’s top producer, and possibly driven by concerns over anticipated slower global economic growth.
The CPO price has dropped sharply from a historical high RM7,000 per tonne to below RM4,000 per tonne last month.
“Continued labour shortage along with rising operating costs remain a great challenge to oil palm plantations. However, CPO price is currently sustainable at around RM4,000 per tonne which is still above the unit production cost,” said the company.
SPB said the group’s financial position remains healthy with reasonable level of liquidity and low gearing.
With the peak crop months approaching and barring any unforeseen circumstances, its board of directors anticipates SPB to achieve a satisfactory financial performance for financial year ending Dec 31, 2022.
