Genting Plantations’ Q2 profit soars to RM104.6 mln

KUALA LUMPUR, Aug 25 – Genting Plantations Bhd’s net profit for its second quarter (Q2) more than quadrupled to RM104.63 million from RM22.64 million a year ago amid firmer palm product prices and higher fresh fruit bunches (FFB) production.

Revenue for the quarter ended June 30, 2021, also increased to RM790.11 million from RM544.32 million previously, it said in a filing with Bursa Malaysia today.

“The group’s Q2 2021 revenue improved notably across all segments, underpinned by higher palm products prices, increased FFB production and better property sales, which eclipsed the impact of lower sales volume from the downstream manufacturing segment,” it said.

Like the plantation and property segments, the downstream manufacturing segment also posted higher earnings before interest, taxes, depreciation and amortisation in the quarter under review, thanks mainly to higher margins.

For the first half-year, the group’s net profit stood at RM168.36 million versus RM113.93 million previously, while revenue improved to RM1.33 billion from RM1.11 billion a year earlier.

“The group registered a year-on-year (y-o-y) growth in revenue for the first half (H1) of 2021 mainly driven by the stronger performance of the plantation segment, coupled with higher sales from the property segment,” it said.

However, the downstream segment recorded a marginal decline in revenue as the impact of higher palm product prices was offset by lower sales volume for biodiesel and refined palm products.

Genting Plantations said in Q2 2021 and H1 2021, the group achieved crude palm oil (CPO) average selling prices of RM3,250 per metric tonne (mt) (up 40 per cent y-o-y) and RM3,105 per mt (up 26 per cent y-o-y) respectively.

Meanwhile, average palm kernel prices recorded in Q2 2021 and H1 2021 were RM2,385 per mt (up 84 per cent y-o-y) and RM2,322 per mt (up 61 per cent y-o-y) respectively.

The group’s FFB production in Q2 2021 and H1 2021 surpassed that of the previous year, spurred by the growth in Indonesia from increased harvesting areas and higher yields, which more than compensated for the drop in Malaysia due to the compounded lagged effects of droughts in early 2019 and 2020 along with its replanting activities.

Genting Plantations said its prospects for the second half of 2021 would track the performance of its mainstay plantation segment, which is in turn dependent principally on the movements in palm product prices and the group’s FFB production.

It noted that the COVID-19 pandemic continued to impact world markets amid resurgent infection waves. Thus, it said, palm oil prices were expected to be mainly influenced by the impact of the pandemic on global economic conditions as well as the demand and supply dynamics of palm oil and other substitute oils and fats.

“Based on the crop trend observed in H1 2021 and barring any weather anomalies, the group expects overall FFB production growth to extend into the second half of 2021 driven by its Indonesian operations as a result of additional harvesting areas and the progression of existing mature areas into higher-yielding brackets.

“However, the growth in output is expected to be moderated by ongoing replanting activities in its Malaysian estates,” it said.

For the property segment, the group said it would continue to offer products that catered to a broader market segment given the prevailing soft market sentiments. Meanwhile, patronage and sales of the Premium Outlets will continue to be adversely affected until the COVID-19 situation has eased.

Meanwhile, the biotechnology segment would continue its work on developing commercial solutions and applications to enhance the yield and productivity of oil palm, it said.

For the downstream manufacturing segment, Genting Plantations said the outlook for biodiesel would remain constrained due to the unfavourable palm oil-gas oil spread but the demand for refined palm products was expected to be resilient given its competitive pricing vis-à-vis other substitute soft oils.

The company’s board has declared an interim dividend of 11 sen per share, up from the six sen per share declared a year ago.

Source: BERNAMA News Agency