KUALA LUMPUR (Aug 30): Sime Darby Plantation Bhd said today it will sell its land in Liberia by end of the year under the group's asset monetisation strategy under which sale proceeds will be used to cut borrowings.

Group managing director Mohamad Helmy Othman Basha said the group's Liberian unit, which has a land bank of more than 10,000ha there, has been continuously loss-making over the years.

He said Sime Darby Plantation is in talks with three parties on the planned sale.

"Liberia asset remains loss-making but we are quite confident that in the next few months we will exit in an appropriate manner. We have been present there for more than 10 years, so when we leave, we want to do so in the best way possible.

"We have informed the Liberian government of our intention to exit," Mohamad Helmy said at the group's first half results press conference here today.

He, however, declined to reveal more on the three parties, but stated that Sime Darby Plantation intends to complete the divestment by the end of the year.

He said land disposals and asset monetisation continue to be the group's strategy as it plans to use sale proceeds to pare borrowings.

Sime Darby Plantation had earlier today reported its latest set of financials to Bursa Malaysia.

It announced a net profit of RM27 million on revenue of RM2.88 billion for the second quarter ended June 30, 2019 (2QFY19) after the group's upstream oil palm operations registered losses due to lower crude palm oil (CPO) prices.

In a statement to Bursa today, Sime Darby Plantation said lower profit at its downstream oil palm operations also affected the group's bottom line. For 1HFY19, it said net profit stood at RM101 million on revenue of RM5.88 billion.

"The average CPO price realised declined by 15% year-on-year (y-o-y) from RM2,379 per MT to RM2,021 per MT whilst the average PK (palm kernel) price realised was lower by 39% y-o-y from RM1,682 per MT to RM1,020 per MT," it said.

At the press conference, Mohamad Helmy said the group is hoping for CPO prices to hover rangebound at about RM2,200 a tonne for the rest of the year. At the time of writing, Malaysia CPO for November 2019 delivery was traded at RM2,239 a tonne.

He said to help ease the impact of weak CPO prices on Sime Darby Plantation's upstream operations, the group intends to increase revenue contribution from the downstream sector.

Currently, upstream and downstream oil palm operations contribute 80% and 20% respectively to Sime Darby Plantation's revenue.

"We want downstream to contribute more significantly. So we will relook at our existing assets and see how we can increase capacity and maximise those that can give us better margins," he said.