KUCHING: Improved profit margins from the sale of palm oil related products have helped to push up the latest quarterly earnings of Sarawak Oil Palms Bhd (SOP) despite a double-digit drop in revenue.
In third quarter to Sept 30, 2019 (Q3-2019), SOP group net profit rose to RM32.6 million from RM19.3 million in Q3-2018 or up by 69 percent although group turnover shrank to RM716.3 million from RM870.3 million or a decline of 18 percent.
Earnings per share (EPS) increased to 5.41 sen from 3.11 sen. “The decrease in revenue was mainly due to lower palm products’ average realized prices coupled with lower volume of palm products transacted.
“However, the group’s profit before tax for the current quarter increased to RM43.2 million compared with RM30.7 million reported in corresponding quarter period last year due mainly to margin improvement on palm products sold,” SOP said in notes to its financials. In Q2-2019, SOP reported group’s net profit of merely RM887,000 on revenue of RM590 million.
Year-to-date, group net profit stood at RM41.12 million, which was down by 32 percent from RM60.37 million recorded in the first nine months of 2018 or down by 32 percent in tandem with a 20 percent drop in group revenue to RM2.05 billion from RM2.55 billion.
SOP group has a diversified portfolio in the downstream processing industry. It owns and operates a palm oil refinery and fractionation plant, kernel crushing plant, biodiesel plant and phytonutrient plant in Bintulu. The group also owns large scale oil palm plantations and several palm oil mills.
On prospects, SOP said the group’s performance would continue to be driven by fresh fruit production and palm products’ price movement which is dependent on the world edible oil market, movement of the ringgit and economic situation.
Meanwhile, BLD Plantation Bhd returned to the black with group pre-tax profit of RM3.2 million in Q2-2019 from hefty loss of RM20.9 million in Q2-2018, thanks to lower average costs and lower fair value loss on derivative. However, group revenue was down by RM20.6 million to RM446.4 million. EPS stood at 1.43 sen.
“Owing to lower average selling price of products, the group’s revenue decreased by about RM76 million during the financial period (H1-2019) as compared to the preceding year.
“Despite the foregoing, the group reported lower loss before tax of RM3.4 million for the current financial period as compared to the preceding year mainly due to fair value gain on derivative,” added BLD.
Commenting on prospects, BLD said: “The prospect of the palm oil industry continues to be uncertain which is largely dependent on global palm oil prices, despite a slight improvement seen in the CPO (crude palm oil) prices during the recent quarter.
“Whilst being cautiously optimistic of the market outlook, the group has commenced and will continue to focus on efficiency enhancement, productivity maximization along with cost reduction in streamlining its production process.” BLD said it would strive to stay resilient amid fast evolving business environment and expects to achieve relatively improved performance for the current financial year ending March 31, 2020.