KUALA LUMPUR (May 23): Genting Plantations Bhd’s net profit for the first quarter ended March 31, 2019 (1QFY19) fell 58.72% to RM41.68 million, from RM100.98 million a year earlier, dragged by lower palm product selling prices.

Earnings per share dropped to 5.16 sen from 12.57 sen, according to the group’s filing with Bursa Malaysia.

Quarterly revenue increased 17.51% to RM621.7 million, from RM529.07 million in 1QFY18.

The group said the average selling price for crude palm oil was 17% lower at RM1,974 per tonne in 1QFY19, while the average selling price for palm kernel was down 38% at RM1,283.

“Palm products selling prices remained pressured by the persistently high inventory levels, protracted US-China trade discord and concerns on demand from major importing countries,” Genting Plantations said.

This was despite the group’s higher fresh fruit bunch (FFB) production in 1QFY19, which grew 14% year-on-year, supported by growth from its Indonesia operations, on the back of an increase in mature areas and better age profile, coupled with a stronger yield from the Malaysia operations, due to a change in cropping pattern.

Moving ahead, the group’s prospects for the rest of the year will track the performance of its mainstay plantation segment, which in turn is dependant principally on movements in palm products selling prices and the group’s FFB production.

Barring any weather anomalies impacting its FFB production, the group expects the overall upward trajectory to continue this year, driven by higher output from its Indonesia operations, underpinned by additional mature areas and a better age profile, the company added.

For its property segment, Genting Plantations said the group will continue with offerings that are aligned to the broader market.

“The premium outlets are expected to perform well in 2019, with the full year contribution from the third phase of Johor Premium Outlets, which commenced operations in November 2018,” the filing said.

Genting Plantations also noted that the biotechnology segment will remain focused on developing commercial solutions and applications to enhance oil palm's yield and productivity.

“With the implementation of the mandatory B10 biodiesel for the transportation sector and B7 biodiesel for the industrial sector in 2019, local demand for the group’s biodiesel operations is expected to improve, while offtake for discretionary biodiesel blending has so far been supported by the favourable palm oil-gas oil spread,” the group added.

For the group’s refinery operations, Genting Plantations said it will continue to focus on expanding its market reach and offtake, including supplying feedstock to cater for the expected increase in demand for the group’s biodiesel production.

Genting Plantation’s shares closed six sen or 0.58% lower at RM10.20 today, giving the group a market capitalisation of RM8.26 billion.