21/08/2023 (The Edge Malaysia), Kuala Lumpur - Innoprise Plantations Bhd posted a 65.18% decline in net profit for the second quarter ended June 30, 2023 (2QFY2023) to RM10.77 million from RM30.94 million a year prior, mainly due to lower average selling prices of crude palm oil (CPO) and palm kernel (PK).

Revenue fell 34.02% to RM51.94 million from RM78.73 million in 2QFY2022, according to the plantation firm’s bourse filing on Monday (Aug 21). “The decrease was mainly due to a significant decline in the average selling price of CPO and PK, which decreased by 40% and 49% respectively,” the group said.

In spite of the year-on-year drop in quarterly earnings, which lowered its earnings per share to 2.25 sen from 6.45 sen previously, it declared an interim dividend of 2.25 sen per share with an ex-date of Sept 11, payable on Sept 21. The group has a policy of paying out at least 80% of its profit after tax as dividend.

For the six months ended June 30, 2023 (6MFY2023), Innoprise’s net profit dropped 67.09% to RM19.9 million from RM60.47 million in 6MFY2022, as revenue fell 31.73% to RM104.58 million from RM153.19 million.

Looking forward, Innoprise said fresh fruit bunch (FFB) production in the coming quarter, 3QFY2023, is expected to be in line with seasonal trend.

Palm oil prices, meanwhile, are anticipated to stabilise at their current level during the second half of the year, taking cue from market uncertainties surrounding the Black Sea’s sunflower oil supply and Malaysia’s palm oil production that remained below expectations, said Innoprise.

“Given the current level of CPO and PK prices, the board is confident of achieving a reasonable profit in [3QFY2023],” Innoprise said. “Management will continue to remain [focused] on productivity and efficiency improvement to reduce unit cost of production,” it added.

Innoprise shares ended unchanged at RM1.28 on Monday, giving the plantation group a market capitalisation of RM612.94 million.

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