22/08/2023 (The Edge Malaysia), Kuala Lumpur - Sarawak Plantation Bhd’s net profit fell 45% to RM16.56 million or 5.93 sen per share in the second quarter ended June 30, 2023 (2QFY2023), from RM30.01 million or 10.75 sen per share a year ago, as operating profit dropped and revenue declined amid lower realised average selling prices of crude palm oil (CPO) and palm kernel (PK), despite higher sales volume.

Group revenue came in at RM127.35 million, down 38.52% from RM207.13 million previously, its bourse filing showed. The decline was partly offset by a gain on fair value changes in biological assets of RM4.6 million, compared with a loss of RM10.7 million recorded in 2QFY2022.

According to the group, average CPO prices dropped 41.6% in the period, while PK prices fell 44.4%, although sales volume for CPO rose 8.1% while PK improved 10%. Oil palm operations contributed RM127.2 million or 99.9% of the group's total revenue for the quarter.

or the six months ended June 30, Sarawak Plantation reported a 61.02% drop in net profit to RM28.58 million from RM73.32 million a year ago, as revenue fell 38.93% to RM238.81 million from RM391.02 million, again due to lower average selling prices of CPO, which dropped 38%, while PK slumped 50.8% in the same period.

"Both fresh fruit bunches and CPO production in the second half of the year will be higher than first half of the year due to peak crop periods occurring in August to October 2023. However, if the Russia-Ukraine war continues, commodity prices [will continue to be] affected, which in turn [will] impact living costs and food security," it said, adding no new plantations within the last three to four years in Indonesia and Malaysia do not help matters.

It expects CPO price to be sustainable at around RM4,000 per metric tonne.

Sarawak Plantation’s shares settled unchanged at RM2.19 on Tuesday (Aug 22), valuing the company at RM613.2 million.

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