KUALA LUMPUR (July 27): United Plantations Bhd's (UP) net profit rose 62.73% to RM123.58 million for the second quarter ended June 30, 2020 (2QFY20), from RM75.94 million a year earlier, on higher revenue and better performance posted by its plantation segment.

According to UP's bourse filing today, quarterly revenue increased 8.79% to RM294.32 million from RM270.53 million previously.

The group said the increase was mainly due to higher production and average prices achieved by its crude palm oil (CPO) and palm kernel products.

It added that due to favourable hedging positions, its refinery segment saw its profit rise about two times compared with the preceding quarter, albeit on lower sales volume, which dipped about 21.1%.

For the cumulative six months ended June 30, 2020, UP posted a total net profit of RM204.77 million, up 43.33% from RM142.86 in the same period last year. Revenue was higher by 3.4% at RM613.22 million from RM592.79 million.

Commenting on its prospects, UP said it will continue to replant areas of its older and less productive oil palm stands in Malaysia this year and emphasise on cost efficiencies and improved productivity.

The group noted that during the month of May, and especially June, the vegetable oil trade started to increase in tune with the global economies opening up, compelling markets to replenish their vegetable oil stocks.

"This increase in demand has had a supportive effect on the market pushing up prices to RM2,600 per tonne of CPO," it said.

"Based on the prices contracted under our forward sales policy and with production improving due to large areas steadily coming into maturity from our replanted areas in Malaysia, the board of directors expects that the results for the year will still be satisfactory and better than in 2019," it added.

Shares in UP closed 12 sen or 0.89% higher at RM13.54, valuing the plantation group at RM5.63 billion. Year-to-date, the stock is up 7.4%.