Genting Plantations posts 63% fall in 2Q profit, pays 4.75 sen dividend

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KUALA LUMPUR (Aug 28): Genting Plantations Bhd’s net profit for the second quarter ended June 30, 2018 (2QFY18) slumped 63% year-on-year to RM26.14 million from RM70.54 million, mainly due to lower palm products selling prices, lower fresh fruit bunch production at its Malaysian operations, and higher foreign currency translation losses.

This resulted in a quarterly earnings per share of 3.25 sen, versus 8.87 sen in 2QFY17, its quarterly results filing today showed.

Revenue fell 10% y-o-y to RM402.65 million from RM446.25 million due to softer selling prices of palm products and lower FFB production in Malaysia, despite its Indonesian ops recording a marginal improvement as higher FFB production negated the impact of weaker selling prices.

Its property segment too turned in weaker earnings due to lower revenue recognition during the quarter, while its biotechnology segment recorded flat performance year-on-year (y-o-y).

Only its downstream manufacturing segment showed a higher y-o-y earnings, as its biodiesel and refinery operations recorded higher capacity from higher offtake.

Genting Plantations declared an interim single-tier dividend of 4.75 sen per ordinary share, payable on Oct 8.

For the first half of FY18 (1HFY18), the group's net profit declined 11% y-o-y to RM127.12 million from RM143.28 million, despite revenue growing 10% y-o-y to RM931.72 million from RM846.47 million.

On prospects, Genting Plantations expects to see a y-o-y production growth in the second half of 2018, driven mainly by its Indonesian estates with the progression of existing mature areas into higher yielding brackets along with higher harvesting areas.

However, output from its Malaysian estates is expected to be moderated by the escalation of replanting activities, it said.

Meanwhile, it expects its Genting Highlands Premium Outlets to continue performing well as it registers its first full year of operations, and is set to launch its third phase of Johor Premium Outlets by year-end.

Its downstream manufacturing segment, meanwhile, will focus on improving refinery operation’s offtake and capacity utilisation.

“The segment will continue supplying for the local B7 biodiesel requirements and has also seen a renewed demand for discretionary biodiesel blending, given the prevailing favourable spread between palm oil and gas oil,” it added.

Shares in Genting Plantations fell two sen or 0.21% to close at RM9.44 today, valuing it at RM7.6 billion.