Genting Plantations’ 3Q net profit rises to RM80.52mil

KUALA LUMPUR: Genting Plantations Bhd’s net profit for the third quarter ended Sep 30, 2023 (3Q 2023) rose to RM80.52 million from RM75.49 million registered in the same quarter last year.

Revenue decreased to RM775.79 million from RM822.37 million.

For the first nine months of the year ended Sept 30, 2023(9M 2023), its net profit slipped to RM190.29 million from RM415.56 million while revenue eased to RM2.17 billion from RM2.40 billion.

In a filing to Bursa Malaysia, the company said it registered a year-on-year (y-o-y) decline in revenue for 3Q 2023 due to lower sales volume at the downstream manufacturing segment.

However, it said the revenue was partly compensated by the plantation segment, which recorded higher revenue on the back of stronger fresh fruit bunch (FFB) production.

Genting Plantations said revenue for 9M 2023 was similarly lower, primarily attributed to weaker palm product prices, which outweighed the improvement in FFB production when compared to the previous corresponding period.

The group also noted that it achieved crude palm oil prices in 3Q 2023 and 9M 2023 at RM3,409 per tonne and RM3,517 per tonne, respectively, whilst palm kernel prices in 3Q 2023 and 9M 2023 were at RM1,776 per tonne and RM1,888 per tonne respectively.

Genting Plantation’s FFB production in 3Q 2023 and 9M 2023 increased y-o-y, mainly driven by the Indonesian estates arising from their favourable age profile and expanded harvesting area, while the Malaysian estates experienced a relatively muted growth as a result of its ongoing replanting activities.

It said earnings before interest, taxes, depreciation, and amortisation (Ebitda) for the plantation segment for 3Q 2023 was higher y-o-y, in line with stronger FFB production, but 9M 2023 Ebitda was lower on account of weaker palm product prices.

For the other business segments, Genting Plantations said Ebitda for the property segment declined y-o-y in 3Q 2023 due to lower sales, the AgTech segment posted lower y-o-y losses in 3Q 2023 due to lower research and development expenditures, while the downstream manufacturing segment recorded losses for 3Q 2023.

On the prospects for the remaining months of 2023, the group said it would track the performance of its mainstay plantation segment, which, in turn, depends principally on the movements in palm product prices and the group’s FFB production.

Genting Plantations said palm oil prices are expected to be under pressure in the immediate term due to the steadily rising inventory in Malaysia and key importing countries.

“In addition, palm oil had to contend with a larger supply of competitor vegetable oils in view of the recovery in production of soybeans in Argentina and sunflowers in the Black Sea region.

“However, in the longer term, palm oil price would remain supported by weaker production prospects owing to slow down of new planting, deferral of replanting and uncertainties of weather conditions,” it added. – BK