United Plantations' Q3 net profit rises to RM95.33mil, revenue at RM334.04mil
09.11.2020 (www.nst.com.my) - KUALA LUMPUR: United Plantations Bhd's net profit rose 58.4 per cent to RM95.33 million in the third quarter (Q3) ended September 30, 2020, from RM60.20 million recorded in the same period a year ago.
In an exchange filing today, the oil palm planter said this was attributed to higher production of crude palm oil (CPO) and palm kernel during the quarter.
Its Q3 revenue increased 19.9 per cent to RM334.04 million from RM278.66 million on the back of higher revenue for the plantation segment.
For the nine-month period, United Plantations' net profit jumped 47.8 per cent to RM300.10 million from RM203.07 million, while revenue rose 8.9 per cent to RM947.26 million from RM871.46 million.
The company said normal supply and demand factors were still relevant, despite the Covid-19 situation.
However, it said direct Covid-19 related factors included disruption in production caused by labour shortages, presently estimated at 90,000 workers.
This was a result of the government's borders closure until at least the end of the calendar year.
"As a result, the impact on palm oil production is expected to increase gradually in the fourth quarter of 2020 and become acutely serious in 2021 as guest workers (who make up around 80 per cent percent of the total labour force in the Malaysian plantation sector) are allowed to leave the country but cannot re-enter until the borders are reopened."
The company said it would be impossible to avoid serious crop losses in 2021 if the government did not provide an urgent yet safe avenue to recruit guest workers.
"This may very likely result in higher palm oil prices due to a reduced production. Until the virus is subdued or a vaccine is found, we expect vegetable oil markets will continue to experience a high degree of volatility."
United Plantations said it would remain vigilant and continue to enforce the various standard operating procedures introduced by the government.
"With a positive liquidity and conservative capital resources, we believe the company will be able to perform satisfactorily without the need for any asset impairments arising from the current Covid-19 pandemic," it added.
United Plantations announced an interim single-tier dividend of 15 sen per share for year ending December 31, 2020 (FY20), payable on December 4.
Additionally, the company announced a special dividend of 5.0 sen per share for FY20.