MARKET DEVELOPMENT
Sime Darby Expects CPO Price To Average Between RM2,500-RM2,600 In Six Months
Sime Darby Expects CPO Price To Average Between RM2,500-RM2,600 In Six Months
03/11/2016 (Bernama) - Sime Darby Bhd expects the crude palm oil (CPO) price to average between RM2,500 and RM2,600 per tonne in the next six months due to the declining production expectations.
President and group chief executive officer Tan Sri Mohd Bakke Salleh said, however, it depended on soybean and palm oil productions.
“I hope we will register higher CPO yield and fresh fruit bunches (FFB) per hectare, as well as, an improved extraction rate, which will be translated into a better bottom line performance,” he told reporters at the group’s AGM in Kuala Lumpur on Wednesday.
Mohd Bakke said the overall FFB production for the group’s financial year (FY) ended June 30, 2016 was 0.2% lower due to the decreased production in Malaysia and Indonesia’s plantations by 11.5% and 10.0%, respectively.
Sime Darby’s plantation division registered a pre-tax profit of RM1.052bil in FY16 despite the lower FFB production, partly mitigated by the higher CPO price in the second half of 2016.
On the overall group’s performance, Mohd Bakke said it expected the gearing ratio to be below 38% for the financial year ending 2017 compared with 44% in FY16.
“The improvement in the gearing ratio resulted from the share placement activity and other asset leveraging activities, hence, credit rating agencies have revised our rating to stable from negative,” he added.
President and group chief executive officer Tan Sri Mohd Bakke Salleh said, however, it depended on soybean and palm oil productions.
“I hope we will register higher CPO yield and fresh fruit bunches (FFB) per hectare, as well as, an improved extraction rate, which will be translated into a better bottom line performance,” he told reporters at the group’s AGM in Kuala Lumpur on Wednesday.
Mohd Bakke said the overall FFB production for the group’s financial year (FY) ended June 30, 2016 was 0.2% lower due to the decreased production in Malaysia and Indonesia’s plantations by 11.5% and 10.0%, respectively.
Sime Darby’s plantation division registered a pre-tax profit of RM1.052bil in FY16 despite the lower FFB production, partly mitigated by the higher CPO price in the second half of 2016.
On the overall group’s performance, Mohd Bakke said it expected the gearing ratio to be below 38% for the financial year ending 2017 compared with 44% in FY16.
“The improvement in the gearing ratio resulted from the share placement activity and other asset leveraging activities, hence, credit rating agencies have revised our rating to stable from negative,” he added.