KUALA LUMPUR (Aug 18): Sarawak Plantation Bhd’s net profit for the second quarter ended June 30, 2020 rose to RM19.39 million, eight times the RM2.42 million it made in the previous year’s corresponding quarter, boosted by an increase in fair value of biological assets.

Revenue for the quarter jumped 28.8% to RM97.42 million from RM75.65 million a year earlier.

In its filing with the bourse, Sarawak Plantation said it saw an RM11.9 million increase in fair value of biological assets during the quarter, which accounted for the big jump in net profit, although it was also supported by higher sales volume of crude palm oil (CPO) and palm kernel (PK) as well as higher average selling prices (ASPs).

“ASPs of CPO and PK had increased approximately by 20.1% and 24.5% whereas sales volumes of CPO and PK had increased by approximately 4.7% and 11.9% respectively for the current interim quarter,” said the company.

For the cumulative first half of its financial year, net profit more than tripled to RM25.2 million from RM7.08 million in the previous year, while revenue increased 35.3% to RM196.3 million from RM145.06 million.

Going forward, the company expects global palm oil demand to recover in the second half of 2020 amid anticipated partial economic recovery, when movement controls are eased, assuming that the Covid-19 pandemic is under control.

It noted that CPO price rose above RM2,800 per tonne since the start of August and exports, particularly to China and India, were increasing.

Malaysia’s palm oil inventories are also down to a three-year historical low level.

“Since the Covid-19 outbreak, the group has refined its operational strategies to minimise disruptions to its business and operations.

“Despite the recent rise in CPO price, the group continues to manage its financial and operational risks in a prudent and cautious manner considering that the current economic situation due to Covid-19 pandemic is still unpredictable,” it said.

Sarawak Plantation shares rose four sen or 2.4% to close at RM1.71, giving it a market capitalisation of RM478.8 million.