KUALA LUMPUR (May 28): Hap Seng Plantations Holdings Bhd’s net profit for the first quarter fell 35.6% to RM15.48 million, from RM24.05 million a year ago, in line with the lower revenue posted.

Earnings per share for the quarter ended March 31, 2018 (1QFY18) fell to 1.94 sen from  3.01 sen in the previous corresponding quarter, the group said in a bourse filing today.

Quarterly revenue shrank 15.9% to RM121.2 million from RM144.1 million in the previous January-March quarter, mainly due to lower average selling prices of crude palm oil (CPO) and palm kernel, despite higher sales volume.

During the quarter, Hap Seng recorded a 6% increase in CPO sales volume to 38,391 tonnes, whilst palm kernel sales volume grew 24% to 8,874 tonnes.

The higher sales volume of CPO and palm kernel were mainly attributable to better extraction rates and higher production, in tandem with higher fresh fruit bunches' (FFB') production.

FFB production was 22% above the year-ago first quarter, attributable to seasonal yield trend, the group said in the filing.

However, it saw a fall in average selling price per tonne of CPO to RM2,590, from RM3,268 previously, while that of palm kernel had come down to RM2,262 in the quarter, from RM3,282 previously.

Hap Seng said it is optimistic of achieving satisfactory results for its current financial year ending Dec 31, 2018 (FY18).

The group is of the view that China’s possible move to impose 25% tariff on soybean imports from US, may boost palm oil prices in the medium term, as this could mean higher soybean prices in China and therefore, reduce soybean crushing activities and supplies there.

Hap Seng also believes the expected increase in palm oil demand during the Ramadan festive season, which began in mid-May, would support CPO prices in the short term.

Shares of Hap Seng Plantations were unchanged at RM2.42 at the closing bell today, giving the group a market capitalisation of RM1.94 billion.