KUALA LUMPUR (May 31): Sime Darby Plantation Bhd announced today that its executive deputy chairman and managing director (MD) Tan Sri Mohd Bakke Salleh (pictured) is retiring from his positions, with Mohamad Helmy Othman Basham to succeed him as MD.

The group also announced that its net profit for the first quarter ended March 31, 2019 (1QFY19) slumped 70.3% to RM74 million from RM249 million in the corresponding quarter that ended March 31 last year, due to a sharp fall in crude palm oil prices (CPO) and palm kernel (PK) prices, as well as higher finance costs. On top of that, the three months ended March 31 also benefitted from a one-off net gain of RM26 million, it said in a statement.

The group said it has changed its financial year end to Dec 31 from June 30, so its 1QFY19 is not comparable with 1QFY18, but it can be compared to the three months that ended March 31, 2018.

"The average CPO price realised declined by 18% year-on-year from RM2,452 per MT (metric tonne) to RM2,012 per MT whilst the average PK price realised was lower by 43% y-o-y from RM2,094 per MT to RM1,204 per MT. The group also benefited from an 8% y-o-y rise in FFB (fresh fruit bunch) production and a higher OER (oil extraction rate) from 21.03% to 21.41%, but these improvements were not sufficient to compensate for the adverse price impact," the group added.

Revenue for 1QFY19 declined 17.8% to RM3.01 billion from RM3.66 billion previously. Earnings per share retreated to 1.1 sen from 3.7 sen.

"The challenging business environment for the palm oil industry with prevailing low CPO and PK prices, as well as a volatile external environment influenced by the US-China trade war has continued to impact the industry's performance.

"We remain encouraged by higher FFB production and OER recorded from our upstream segment as well as continuing profitability of Sime Darby Oils during the quarter under review. We believe the decision to rebrand our downstream business would augur well with our strategy for a more balanced profit contribution from our upstream and downstream segments, moving forward," said Mohd Bakke in the statement.

In a separate filing, the group said Mohd Bakke, 64, will be vacating his post on June 30, while 52-year-old Mohamad Helmy, who is currently the group's deputy MD, will fill the post the following day. Mohamad Helmy is currently also Sime Darby Plantation's upstream chief operating officer.

Mohd Bakke, according to the group, was appointed the group's executive deputy chairman and MD on Nov 21, 2017.

Sime Darby Plantation's shares climbed 10 sen or 2.19% to trade around RM4.66 at 4.13pm, after 3.77 million shares changed hands - giving it a market capitalisation of RM32.06 billion.