KUALA LUMPUR, May 25 — Genting Plantation Bhd’s net profit for the first quarter ended March 31, 2022 (Q1 2022) surged to RM116.64 million from RM63.73 million in the same quarter last year.
However, revenue eased to RM530.43 million from RM536.58 million previously due to lower sales volume for its downstream manufacturing segment, partly compensated by the plantation segment which recorded higher revenue on the back of stronger palm product prices.
In a filing with Bursa Malaysia today, the group noted that fresh fruit bunches (FFB) production in Q1 2022 was marginally lower year-on-year (y-o-y) as heavy rainfall during the quarter disrupted estate operations in Indonesia, mitigated by a strong recovery in Malaysian estates against a drought-induced low production a year ago.
"The group achieved crude palm oil and palm kernel prices of RM4,797 per tonne and RM4,114 per tonne, respectively.
Reflective of the higher palm products selling prices, Q1 2022 earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the plantation segment improved y-o-y due to better margins, the filing said.
Meanwhile, the property segment EBITDA declined y-o-y in tandem with lower sales and revenue and the agriculture technology (AgTech) segment narrowed its losses in line with higher revenue achieved y-o-y, it noted.
Moving forward, the group said prospects for the year will track the performance of its mainstay plantation segment, which is dependent principally on the movements in palm products prices and the group’s FFB production.
For the short term, the group expects palm oil prices to be supported by tight supply of palm oil and other oil and fat substitutes, backed by a confluence of factors such as the unresolved labour shortage in Malaysia, drought in key soybean producing areas and the protracted Russia-Ukraine conflict.
Meanwhile, the uncertainties surrounding Indonesia’s export policy will contribute towards volatility to palm oil prices, it said
The group expects a moderate growth in FFB production for the year, sustained by crops in additional areas maturing and existing mature areas progressing into higher yielding brackets in Indonesia, the filing said.
On the other hand, the on-going replanting activities in Malaysia may constrain the group's production growth, it said.
The group said it will continue to offer properties that cater to a broader market segment, while its AgTech segment will continue to unlock value by leveraging new technologies to augment the development of optimised genomics-based next generation planting materials and biological solutions for plant and soil health to improve yields.
As for the downstream manufacturing segment, the group said refined palm products from Malaysia continue to face stiff competition from its Indonesian counterparts which enjoy cost saving in feedstock.
On another note, it added that the outlook for palm-based biodiesel will remain challenging due to the unfavourable palm oil-gas oil spread. — Bernama
