Genting Plantations posts RM71mil profit in 2Q, declares 8.0 sen dividend

KUALA LUMPUR: Genting Plantations Bhd’s prospect for the second half of 2023 (2H23) will track the performance of its mainstay plantation segment.

The group said the segment is dependent principally on the movements in palm product prices and its fresh fruit bunches (FFB) production.

“In the short run, the group expects palm product prices to remain supported as palm oil production is expected to be impacted by the looming El Nino phenomenon in major palm oil-producing regions.

“Additionally, palm product prices have gained strength amidst the geopolitical tension in the Black Sea region which disrupted the supply of sunflower oil, along with drought in North America potentially affecting the production of soya and canola oil,” Genting Plantations said in a statement.

It expects a modest year-on-year growth in FFB production for 2H23, spurred by the favourable age profile and expanded harvesting area in Indonesia.

“Furthermore, the potential occurrence of El Nino could also impact the group’s production in 2H23, the extent of which will depend on the timing and severity of the phenomenon,” it added.

Its property segment will continue to offer products that cater to a broader market segment, taking into consideration the prevailing market sentiments.

“The downstream manufacturing segment continues to face stiff competition for its refined palm products due to Indonesia’s export tax structure. On the other hand, the segment’s palm-based biodiesel will cater mainly to Malaysian biodiesel mandate as biodiesel export remain challenging,” Genting Plantations said.

In the second quarter ended June 30, it posted a net profit of RM71mil compared with RM223.4mil a year ago.

Its revenue was 23% lower at RM805.9mil against RM1.04bil while earnings per share fell to 7.91 sen from 24.90 sen previously.

For the first six months (1H23), Genting Plantations posted a net profit of RM109.8mil on revenue of RM1.4bil.

The group’s achieved crude palm oil prices in 2Q23 and 1H23 were similar at RM3,584 per tonne, whilst palm kernel prices in 2Q23 and 1H23 were RM1,945 per tonne and RM1,963 per tonne respectively.

Its FFB production in 2Q23 and 1H23 increased year-on-year primarily driven by improved production in Indonesia, attributable to its favourable age profile and expanded harvesting area. This has more than compensated for the marginally lower output in Malaysia as a result of its ongoing replanting activities.

The board of directors has declared an interim single-tier dividend of 8.0 sen per ordinary share.

In comparison, the interim single-tier dividend declared for the corresponding period of 2022 amounted to 15.0 sen per ordinary share.