PETALING JAYA: Sime Darby Plantation Bhd’s (SDP) net profit for its second quarter ended June 30, 2021 jumped 63.2% to RM617 million from RM378 million in the same quarter of the previous year, driven by higher recurring profit in upstream and downstream segments.
Revenue for the quarter stood at RM4.41 billion, a 37.2% improvement from RM3.22 billion previously.
SDP’s upstream operations reported a more than twofold increase in profit before interest and tax (PBIT) of RM789 million for the quarter against RM316 million previously.
The quarter saw a higher realised crude palm oil (CPO) and palm kernel (PK) price of 54% and 85%, respectively, while oil extraction rate improved to 21.63% from 21.29%.
SDP’s downstream operations saw PBIT increase more than sixfold to RM146 million from RM24 million, attributed to improved results from its Asia-Pacific bulk operations as well as its refineries in Europe and Africa.
Its other operations registered PBIT of RM14 million against RM10 million previously, due mainly to higher share of results of associates.
In the first half ended June 30, 2021, the group’s net profit improved 39.4% to RM1.18 billion from RM846 million previously. Revenue for the half rose 29.1% to RM8.08 billion from RM6.26 billion.
SDP has declared an interim dividend of 7.90 sen which will be paid on Nov 12, 2021.
Commenting on the results, group managing director Mohamad Helmy Othman Basha said SDP performed well despite challenges ranging from labour shortages to the Withhold Release Order imposed by the US Customs and Border Protection on its Malaysian products.
“The board and management are focused on protecting shareholder value and building on our strong foundation, while finding new solutions, to effect and implement the necessary improvements,” he said in a statement today.
Moving forward, SDP expects its operations in Indonesia and Papua New Guinea to register higher fresh fruit bunch production this year supported by better weather conditions.
With the continued impact of labour shortages on Malaysia’s CPO production as well as tight global vegetable oil inventories, the group expects prices to remain firm and its performance for FY2021 to be promising, barring any unforeseen circumstances.