KUALA LUMPUR (Aug 26): Genting Plantations Bhd’s (GENP) net profit grew 9.13% to RM22.64 million in the second quarter ended June 30, 2020 (2QFY20) from RM20.74 million a year ago, on higher palm products selling prices despite lower fresh fruit bunches (FFB) production.

The group said the average price levels for palm products were comparatively higher year-on-year as palm products prices in 2019 were burdened by higher inventory levels and weaker soybean oil prices amid the US-China trade dispute coupled with the African Swine Fever outbreak in China.

Quarterly revenue rose 2.53% to RM544.32 million from RM525.74 million previously, the group said in its filing with the stock exchange.

GENP said its plantation segment recognised a profit before tax of RM100.8 million, 57% higher compared with RM64.2 million last year.

The group declared an interim dividend of six sen per share, payable on Sept 24.

For the first six months of FY20, GENP saw its net profit jump 82.5% to RM113.93 million from RM62.23 million last year, despite revenue slipping 2.97% to RM1.11 billion from RM1.15 billion.

Going forward, the group said its prospects for the second half of FY20 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.

“The group expects palm products prices to be primarily influenced by factors such as the demand and supply dynamics of palm oil and substitute oils and fats, global economic conditions and the implementation of higher biodiesel mandates by Indonesia and Malaysia,” said GENP.

Barring any weather anomalies, the group expects FFB production to register an improvement in the second half underpinned by a recovery in crop output from the lagged effect of drought in 2019.

Notwithstanding the crop recovery in the second half, production for the full year is anticipated to at best match the level attained in FY19, said GENP.

GENP’s shares closed unchanged at RM9.90 today, valuing the group at RM8.88 billion.

Edited by S Kanagaraju