Sime Darby Plantation 3Q net profit at RM190m as upstream segment lifts

Sime Darby Plantation 3Q net profit at RM190m as upstream segment lifts
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KUALA LUMPUR (Nov 23): Sime Darby Plantation Bhd (SDP) posted a net profit of RM190 million for the third quarter ended Sept 30, 2020 compared to a net loss of RM243 million a year earlier, driven by higher crude palm oil (CPO) and palm kernel (PK) prices realised.

In a bourse filing today, the planter said revenue for the quarter rose 13% to RM3.18 billion from RM2.82 billion previously.

Earnings per share was 2.8 sen versus loss per share of 3.5 sen earlier.

For the nine months ended Sept 30, SDP said net profit surged to RM1.04 billion from a net loss RM142 million a year ago, on the back of a 9% increase in revenue to RM9.44 billion against RM8.69 billion.

Reviewing its performance, SDP said the improvement in the recurring profit in the quarter under review was primarily attributed to the upstream segment.

The group said it also reported lower non-recurring loss before interest and tax than the corresponding quarter, mainly due to lower impairment charges recognised.

In a separate statement, SDP chairman Tan Sri Megat Najmuddin Megat Khas said for the rest of the financial year, the group will remain focused on delivering value to stakeholders as it navigates through the current challenging environment.

“We will continue to prioritise the health and safety of our stakeholders, the job security of our employees, our commitment to sustainable practices, protection of human rights as well as our R&D and innovation initiatives.”

Meanwhile, group managing director Mohamad Helmy Othman Basha said despite the challenges posed by the pandemic on global markets, CPO prices continue to be supported in the second half of the year, whilst palm oil demand has improved and is expected to grow further in 2021.

He said as a sector that provides essential products to the world, this industry is showing resilience amid global uncertainties.

Mohamad Helmy urged unemployed Malaysians to seize the job opportunities available in the palm oil industry at present.

“As a measure to further mitigate the industry’s current labour shortage, we also hope the government will continue with its efforts to alleviate restrictions on foreign labour, whilst the group continues to ramp up mechanisation and digitalisation efforts to increase productivity and reduce reliance on labour in the medium to long term,” he said.

SDP said it expects its performance for the financial year ending Dec 31, 2020 to be better than last year.

SDP shares were last traded at RM5.17, for a market capitalisation of RM35.59 billion.