KUALA LUMPUR: Sime Darby Plantation Bhd’s (SD Plantation) net profit surged 20.1 per cent to RM562 million in the first quarter (Q1) ended March 31, 2021 from RM468 million recorded in the same quarter in 2020.
SD Plantation, in a statement today, said its upstream performance had improved to a pre-tax profit of RM543 million from RM288 million pre-tax profit a year ago on the back of sustained higher crude palm oil (CPO) and palm kernel (PK) prices as well as increased fresh fruit bunch (FFB) production.
In the same period, the company’s downstream operations, Sime Darby Oils, recorded a 20 per cent increase in pre-tax profit to RM107 million, primarily attributable to improved performance in the Asia Pacific region.
The company’s revenue jumped 20.7 per cent to RM3.67 billion from RM3.04 billion.
SD Plantation group managing director Mohamad Helmy Othman Basha said it had seen an improvement in the results of Sime Darby Oils in the Asia Pacific, which benefited from the market price uptrend.
However, he said demand had yet to fully recover from the impact of Covid-19.
The group, Helmy said, was working with several parties to address the withhold release order imposed by the US Customs and Border Protection at the end of 2020.
It had appointed a third-party assessor to undertake a comprehensive review of all its Malaysian operations.
The exercise is expected to be completed in June.
“We are committed to protecting the rights and safety of our workforce regardless of race, nationality or gender. As such, we are focused on ensuring safe working and living conditions for all our employees,” he said.
SD Plantation chairman Tan Sri Megat Najmuddin said with the strong showing in Q1, the company was on track to achieve its financial targets for the rest of financial year 2021.
“While the sustained high CPO price has certainly been a boon for the industry, I am also encouraged by our operational performance despite the challenges presented by the Covid-19 pandemic. With the current spike in infection cases in certain parts of the world, including Malaysia, we are cognisant of the continuing risks and threats from the pandemic.
SD Plantation said CPO price in Q1 was driven primarily by record high prices of substitute oils and was expected to soften in the second half of 2021 as production increased.
“On the operational front, the group anticipates improved production this year whilst sustaining its efforts to increase efficiency and productivity through digitalisation, automation and mechanisation. Barring any unforeseen circumstances, SD Plantation expects its performance for the financial year ending December 31, 2021 to be promising,” it added.
Source: News Straits Times
