MARKET DEVELOPMENT
United Plantations' Q3 net profit jumps 61.7pc to RM154.15mil, revenue at RM525.50mil
United Plantations' Q3 net profit jumps 61.7pc to RM154.15mil, revenue at RM525.50mil
08.11.2021 (www.nst.com.my) - KUALA LUMPUR: United Plantations Bhd's net profit jumped 61.7 per cent year-on-year (YoY) to RM154.15 million in the third quarter (Q3) ended September 30, 2021, from RM95.33 million recorded previously.
In an exchange filing today, the oil palm plantation company said this was fuelled by higher crude palm oil (CPO) and palm kernel prices.
Its Q3 revenue grew per cent YoY to RM525.50 million from RM334.04 million on the back of higher contributions from both the plantation and refinery segments.
For the nine-month period, United Plantations' net profit increased 21.5 per cent YoY to RM364.76 million from RM300.10 million, while revenue expanded 48.4 per cent to RM1.41 billion from RM947.26 million.
The company declared an interim single-tier dividend of 30 sen per share payable on December 3 this year.
On the outlook for the remaining period, United Plantations said the shortage of workers/labours continued to be a painful reminder of how fragile and labour intensive the oil palm industry is.
"Significant losses of fresh fruit bunches left unharvested in the fields has therefore been a growing trend in the Malaysian palm oil industry during 2021."
It added that Malaysian production had declined by 9.7 per cent during the first nine months of the year compared to the same period in 2020 due to the inability to bring out the crop due to a chronic labour shortages.
"The acute shortage of guest workers (around 85 per cent percent of the total labour force in the Malaysian plantation sector) has proven to be a significant challenge for the plantation industry during the last 18 months including United Plantations."
Nonetheless, it said the main challenge for the plantation sector is to onboard these workers as expeditiously as possible including the steps required to provide them with work permits, vaccinations and other important pre-conditions before work can proceed.
"It is therefore not a measure that will create relief in the last quarter of 2021 and at best case the industry will only likely feel the positive impact of this by the end of the first quarter of 2022."
Meanwhile, it said most market price forecasters had lowered their 2021 CPO production estimates from around 20 million tonnes to currently around 18 million tonnes, which has resulted in bullish palm oil prices.
"The board views the current palm oil prices as being excessive and expects a correction to take place in the coming months."
United Plantations expects its results for the year will be better than in 2020. https://www.nst.com.my/business/2021/11/743574/united-plantations-q3-net-profit-jumps-617pc-rm15415mil-revenue-rm52550mil