KUALA LUMPUR (Nov 29): Depressed prices for palm products weighed on the performance of Genting Plantations Bhd, its earnings slumping 69% to RM23.5 million or 2.93 sen per share in the third quarter ended September, from RM76.46 million or 9.63 sen per share a year ago.

This was despite a 12.7% year-on-year (y-o-y) growth in revenue to RM488.84 million from RM433.89 million, on the back of improved offtake from its downstream manufacturing segment and better sales at its Indahpura project.

For the cumulative nine months, net profit amounted to RM150.63 million, 31.5% lower compared with RM219.74 million in the same period last year. Cumulative revenue grew 11% to RM1.42 billion, from RM1.28 billion before.

In a bourse filing, the plantation giant attributed its lower earnings to the continued slump in the prices of palm products during the quarter under review, which it said was due to weak demand, elevated stock levels, and expectations of a seasonal high crop output.

"Consequently, the group registered lower y-o-y average crude palm oil prices of RM2,043/tonne and RM2,235/tonne in 3Q18 and YTD (year to date), respectively.

"Likewise, palm kernel prices were also lower compared to the corresponding periods of the previous year, averaging at RM1,620/tonne and RM1,812/tonne for 3Q18 and YTD 2018 respectively," it said.

Its fresh fruit bunches production was higher y-o-y for the periods, it said, underpinned by the higher crop output from Indonesia, owing to an increase in mature areas and better age profile.

This helped compensate for the drop in Malaysia, due to a shift in cropping pattern along with a decline in mature areas stemming from replanting activities.

Genting Plantations expects higher production in the remaining quarter in view of the onset of production uptrend.

The group is optimistic of an improved y-o-y performance this year for its property segment following the commencement of operations at Johor Premium Outlets, in addition to the first full year contribution of Genting Highlands Premium Outlets.

It also foresees better performance for its downstream manufacturing segment on the back of underlying demand for its products.

The benchmark palm oil third-month contract was last traded RM5 lower at RM2,009 per tonne, at the time of writing.

Genting Plantations rose two sen or 0.21% to close at RM9.65, for a market capitalisation of RM7.77 billion.