Photo by Zahid Izzani/The Edge

KUALA LUMPUR (Aug 20): Johor Plantations Group Bhd (KL:JPG), a palm oil producer listed just last month, reported that its net profit nearly quadrupled for the second quarter, thanks to higher prices and sales volume.

Net profit for the three months ended June 30, 2024 (2QFY2024) was RM49.74 million, compared with RM12.65 million for the same quarter a year ago, Johor Plantations said in an exchange fling. Earnings per share were 2.44 sen in 2QFY2024, versus 0.70 sen per share a year earlier.

Revenue for the quarter rose 34.86% to RM360.91 million, from RM267.61 million a year ago. The group also declared its first interim dividend of 1.25 sen per share, to be paid on Sept 24.

Moving forward, the company said that it will continue to drive its operational efficiency, particularly in improving its yield, oil extraction rate, and plants, as well as accelerate mechanisation and digitalisation efforts.

Prices of the edible oil used in everything from lipstick to diesel have fallen about 15% from this year’s peak on April 3, amid a decline in competing oils, while a stronger ringgit makes palm oil costlier for importers. Output is also expected to pick up seasonally, blunting the impact of gains in demand.

Production of palm fresh fruit bunches typically strengthens month-on-month in the second half of the year and peak in October, driving sales of both crude palm oil (CPO) and palm kernel. The benchmark palm oil contract for third month delivery was at RM3,715 on Bursa Malaysia Derivatives on Tuesday.

Johor Plantations achieved an average selling price of RM4,211 per tonne for CPO in 2QFY2024, up 1.5% year-on-year (y-o-y), while the average palm kernel price rose 17% to RM2,611 per tonne. Delivery volume for CPO and palm kernel both rose 31% in 2QFY2024.

For the first half ended June 30, 2024 (1HFY2024), the group’s net profit more than doubled to RM99.71 million, from RM36.05 million, as revenue increased by 26.22% to RM655.82 million, from RM519.59 million.

The average CPO price was slightly lower at RM4,144 per tonne in January-June, though the average palm kernel price rose 11.2% y-o-y to RM2,497 per tonne in 1HFY2024. Delivery volume for CPO climbed 26%, while that of palm kernel was up 19%.

Shares in Johor Plantations closed unchanged at 92.5 sen on Tuesday, valuing the group at RM2.30 billion, ahead of the results announcement.