KUALA LUMPUR: Sime Darby Plantation Bhd (SDP) posted a higher net profit of RM718 million in the first quarter ended March 31, 2022 (Q1FY22) from RM562 million in the same period last year.
Revenue also rose to RM4.38 billion from RM3.67 billion previously.
In a filing with Bursa Malaysia today, the plantation company said the performance was driven by higher crude palm oil (CPO) and palm kernel (PK) prices in the upstream segment and improved downstream performance.
"(For the upstream segment), the total recurring profit before interest and tax (PBIT) rose 55 per cent to RM839 million versus RM543 million in the corresponding quarter primarily due to higher CPO and PK prices which increased by 40 per cent and 84 per cent, respectively.
"PBIT from the downstream sector increased to RM132 million in the current quarter mainly due to higher margins generated by the Asia Pacific bulk operations which benefited from Roundtable on Sustainable Palm Oil (RSPO) premiums on crude palm kernel oil sales, mitigating lower sales volumes and margins in Asia Pacific differentiated and European operations," it said.
Besides that, it said other operations also reported higher profits mainly due to a higher share of results from its associates and joint ventures.
On the outlook, chairman Tan Sri Megat Najmuddin Megat Khas said he is confident that SDP would be able to leverage the current opportunities and continue to deliver an encouraging performance in 2022.
"The group believes that while palm oil demand may be impacted by the current elevated prices, this will be mitigated by the tight supply and availability of alternative vegetable oils as well as supply chain disruptions caused by the ongoing Russia-Ukraine conflict.
"The group anticipates lower overall FFB (fresh fruit bunches) production against FY2021 as the intake of new foreign workers for the plantation industry is only expected to arrive in the second half of the year," he added.