KUALA LUMPUR (Nov 24): Genting Plantations Bhd saw its net profit jump 67% to RM102.22 million for the third quarter ended Sept 30, 2021 (3QFY21), from RM61.38 million in the previous year’s corresponding quarter, helped by the increases in palm products prices.

Revenue for the quarter increased 14% to RM732.82 million from RM645.56 million a year ago.

In its filing with the bourse, Genting Plantations attributed the growth for the quarter to the stronger performance of its plantation segment, underpinned by the increases in prices of palm products.

It said the downstream manufacturing segment posted marginally lower year-on-year revenue amid lower sales volume, although this was mitigated by the higher selling prices.

Fresh fruit bunch (FFB) production was flat year-on-year, it added, as the higher crop production in Indonesia, in line with increased harvesting areas and better yields, compensated for the lower harvest in Malaysian estates due to the lagged effects of droughts and progressive replanting activities.

“CPO (crude palm oil) prices trended upwards in 3Q2021 (third quarter of 2021), recovering from year-to-date lows in June 2021 to hover around the RM4,500 range for most of the quarter against the backdrop of supply tightness and strengthening of other edible oil prices.

“Accordingly, the group achieved higher year-on-year average CPO prices for 3Q2021,” it said. 

Meanwhile, its property segment saw marginally lower EBITDA despite posting higher revenue, driven from the sale of an investment property recognised in 2020.

The group’s biotechnology segment narrowed losses year-on-year, amid lower research and development expenditure.

For the nine months ended Sept 30, its net profit rose 54% to RM270.58 million from RM175.31 million a year earlier, while revenue climbed 17% to RM2.06 billion. 

“The group’s prospects for the remaining months of 2021 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,” said Genting Plantations.

Looking ahead, it expects palm oil prices to remain resilient in the remaining part of the year, supported by sustained demand amid global economic recovery, tightness in supply ahead of the upcoming monsoon season, as well as the historically high prices of other substitute oils and fats.

While its FFB production grew in the first half of 2021, it said growth has moderated since then, in line with seasonal cropping patterns, coupled with unfavourable weather conditions.

The group expects its FFB production for the year to be comparable to last year.

For the property segment, it said it will continue to offer products which cater to a broader market segment, adding that the recent lifting of travel restrictions has resulted in encouraging recovery in the patronage and sales of its premium outlets, and is expecting a likely rebound in the fourth quarter of 2021, subject to the developments around the Covid-19 situation.

The biotechnology segment will continue to develop commercial solutions and applications to enhance the yield and productivity of oil palm, the company noted.

It added the downstream segment is expected to remain resilient given its competitive pricing against other substitute soft oils. It said the outlook for biodiesel, on the other hand, will remain challenging due to the unfavourable palm oil-gas oil spread.

Genting Plantations rose two sen or 0.3% to close at RM6.94, giving a market capitalisation of RM6.23 billion.