Genting Plantation pays 15 sen dividend after 2Q net profit surges on higher palm oil prices
24/08/2022 (The Edge Markets), Kuala Lumpur - Boosted by sharply higher palm oil prices, Genting Plantation Bhd’s net profit for the second quarter ended June 30, 2022 (2QFY22) more than doubled to RM223.43 million or earnings per share of 24.9 sen, from RM104.63 million or 11.66 sen.
Quarterly revenue was higher by 32.36% to RM1.05 billion from RM790.11 million.
The group declared an interim single-tier dividend of 15 sen per share, four sen higher than the 11 sen declared for the corresponding period of 2021. The latest dividend payout’s ex date falls on Sept 9, to be paid on Sept 26.
Compared with its preceding quarter of 1QFY22, its net profit also soared 91.55% from RM116.64 million due to higher fresh fruit bunch (FFB) production and better margins from the downstream manufacturing segment while revenue jumped 97.16% from RM530.43 million.
The strong quarterly performance also lifted its cumulative first half net profit (1H22) to RM340.08 million, twice its net profit of RM168.36 million a year ago. Revenue also rose 18.81% to RM1.58 billion from RM1.33 billion previously.
In a statement filed with Bursa Malaysia on Wednesday, Genting Plantations said it registered higher year-on-year (y-o-y) revenue for 2Q22 and for 1H22 on the back of strengthening palm product prices, which more than compensated for lower FFB production and sales volume of refined palm products.
“The group’s achieved crude palm oil price in 2Q22 and 1H22 were RM4,907 per tonne and RM4,860 per tonne respectively, while palm kernel price in 2Q22 and 1H22 were RM3,484 per tonne and RM3,777 per tonne respectively.
"The crude palm oil price in 2Q21 and 1H21 were RM3,250 per tonne and RM3,105 per tonne respectively, while palm kernel price stood at RM2,385 per tonne in 2Q21 and RM2,322 per tonne in 1H21.
“The group’s FFB production in 2Q 2022 and 1H 2022 were lower y-o-y as persistent wet weather affected harvester outturn while certain estates were faced with logistic issues as heavy rainfall caused flooding and damaged access roads, particularly in Indonesia,” it explained.
It added that Malaysia continued with its replanting programme which led to a reduction in harvesting area.
Moving forward, the group said prospects for the second half of 2022 (2H22) will track the performance of its mainstay plantation segment, which is in turn dependent principally on the movements in palm products prices and the group’s FFB production.
In the short run, the group expects palm oil prices to remain under pressure from the mounting stockpile in Indonesia as a result of its export ban.
Nonetheless, the Indonesian government has since introduced various measures to ease the swelling stockpile, which may provide some support to palm oil prices, it noted.
While FFB production was weaker in 1H22, the group anticipates an improvement in 2H22 with favourable age profile and additional harvesting area in Indonesia, barring any weather anomalies.
Nevertheless, the production growth may be moderated by the on-going replanting activities in Malaysia, it added.
Genting Plantations’s share price closed down three sen or 0.46% at RM6.49 on Wednesday, giving the company a market capitalisation of RM5.82 billion.