KUCHING: Sarawak Plantation Bhd, which recorded a group net profit of RM96.7 million on revenue of RM710.9 million for financial year ended Dec 31, 2022 (FY2022), is upbeat about the outlook of the palm oil industry in 2023.
The company based the positive outlook to the likelihood of crude palm oil (CPO) price staying firm backed by anticipated rising demand, in particular from biodiesel and expected higher import by China following the loosening of its COVID-19 restriction.
“Oil palm production is expected to increase following improvement in labour supply,” it added when commenting on the company’s prospects in 2023.
However, Sarawak Plantation cautions that oil palm production may be disrupted due to uncertain weather pattern.
In FY2022, Sarawak Plantation’s financial results were weaker as compared to group net profit of RM127.8 million and revenue of RM790.5 million in FY2021 due to lower sales volume of CPO and palm kernel (PK) in the current year under review.
“The group’s operating profit before tax was RM141.4 million for the current financial year as compared to operating profit before tax of RM149.0 million for the preceding year.
“The decrease in operating profit was principally due to the effect of lower sales volume of CPO and PK despite higher realised average selling prices of CPO and PK, and higher production cost during the current financial year,” it added.
Year-on-year, Sarawak Plantation said it posted lower pre-tax profit of RM134.2 million against RM168.4 million in FY2021 following lower operating profit coupled with a loss on fair value changes of biological assets of RM7.2 million in CY2022 against a gain of RM21.4 million in FY2021.
Earnings per share declined to RM34.66 sen from RM45.81 sen in FY2021. In fourth quarter 2022 (Q42022), Sarawak Plantation group net profit fell sharply to RM5.13 million from RM32.5 million in Q42021 as revenue plunged to RM158.1 million from RM243.6 million.
In the current quarter under review, the group operating profit declined to RM23.4 million from RM57.6 million in Q42021 because of lower sales volume of CPO and PK, lower realised average selling prices of CPO and PK, and higher estate cost. Group pre-tax profit fell to RM11.1 million from RM43.8 million in Q42021 due to lower operating profit coupled with a loss on fair value changes of biological assets of RM12.3 million in the current quarter.
Sarawak Plantation’s oil palm operations comprise estate and mill operations. In Q42022, estate operations registered a segment revenue and profit of RM63.6 million and RM21.5 million respectively whereas mill operations recorded revenue and profit of RM146.5 million and RM6.2 million respectively.
The oil palm operation segment contributed 99.9 per cent to group revenue of RM158.1 million.
“Revenue of the oil palm operation decreased by RM85.5 million to RM157.9 million in the current interim quarter compared with RM243.4 million recorded in the corresponding period of the preceding year.
The decrease was principally attributed to the lower sales volume of CPO and PK by 12.0 per cent and 9.3 per cent and lower realised average selling prices of CPO and PK by 23.8 per cent and 45.3 per cent respectively during the current interim quarter,” said the company.
