KUALA LUMPUR (May 31): Sime Darby Plantation Bhd said third quarter net profit fell 39% to RM249 million from RM410 million a year earlier, as oil palm fresh fruit bunch (FFB) dropped. 

Lower realised average prices of crude palm oil (CPO) and palm kernel (PK) also led to group net profit dropping in the third quarter ended March 31, 2018 (3QFY18), Sime Darby Plantation told Bursa Malaysia today. Revenue was lower at RM3.66 billion versus RM4.35 billion, it added.

"Recurring profit before interest and tax of RM362 million declined by 50%, mainly due to lower profits from the upstream operations arising from lower production of FFB, lower average CPO and PK prices realised," Sime Darby Plantation said.

For 9MFY18, Sime Darby Plantation said net profit climbed to RM1.7 billion, from RM879 million a year earlier. Revenue was higher at RM11.29 billion, compared to RM11.09 billion.

"Barring any extreme weather abnormalities, the group expects the full year FFB production to improve from the previous financial year, as the El Niño effect tapers off. Although this is expected to continue putting downward pressure on CPO prices, the upcoming festive season and possible tariffs by China on soybean imports from the US, could lend support to palm oil demand," Sime Darby Plantation said.

At Bursa Malaysia today, Sime Darby Plantation shares settled at RM5.42 at 12:30pm for a market value of RM36.79 billion. The stock saw 875,100 shares traded.