KUALA LUMPUR (May 25): Genting Plantations Bhd’s first quarter net profit ended March 31, 2022 (1QFY22) surged 83.02% to RM116.64 million, compared with RM63.73 million the prior year, on higher palm products selling prices. 

As a result, earnings per share for the quarter under review rose to 13 sen, from 7.1 sen previously. 

Revenue, on the other hand, dipped marginally to RM530.43 million from RM536.58 million a year earlier, due to lower sales volume for the downstream manufacturing segment. 

“[The fresh fruit and bunch] FFB production in 1Q2022 was marginally lower year-on-year, as the heavy rainfall during the quarter disrupted estate operations in Indonesia, mitigated by a strong recovery in Malaysian estates against a drought-induced low production a year ago. 

“The group achieved crude palm oil and palm kernel prices of RM4,797 per metric tonne (mt) and RM4,114 per mt respectively. Reflective of the higher palm products selling prices, 1Q2022 EBITDA [earnings before interest, taxes, depreciation and amortisation] for the Plantation segment improved year-on-year, on account of better margins. 

“EBITDA from the Property segment for 1Q2022 declined year-on-year, in tandem with lower sales and revenue. The AgTech segment narrowed its losses for 1Q2022, in line with higher revenue achieved year-on-year,” said Genting Plantations in a statement filed with Bursa Malaysia on Wednesday (May 25). 

According to Genting Plantations, the prospects for the rest of the year will track the performance of its mainstay plantation segment, which is in turn dependent principally on the movements in palm products' prices and the group’s FFB production. 

For the short term, the group said it expects palm oil prices to be supported by supply tightness of palm oil and other substitute oils and fats, backed by a confluence of factors such as the unresolved labour shortage in Malaysia, drought in key soybean producing areas and the protracted Russia-Ukraine conflict. 

Meanwhile, the uncertainties surrounding Indonesia’s export policy will contribute towards volatility in palm oil prices, it said. 

“The group expects a moderate growth in FFB production for the year, sustained by additional areas coming into maturity and progression of existing mature areas into higher yielding brackets in Indonesia. On the other hand, the ongoing replanting activities in Malaysia may constrain the group's production growth,” Genting Plantations added. 

Genting Plantations shares closed unchanged at RM8.18 on Wednesday, giving the company a market capitalisation of RM7.34 billion.