26.02.2019 (The Sun Daily) - PETALING JAYA: Genting Plantations Bhd’s net profit for the fourth quarter ended Dec 31, 2018 plunged 87.6% to RM14.27 million from RM115.35 million a year ago due to weaker palm products selling prices.

In a filing with Bursa Malaysia, the group said it registered lower crude palm oil (CPO) and palm kernel (PK) average selling prices of RM1,848/mt and RM1,357/mt respectively during the quarter, reflecting declines of 28% and 47% respectively from a year ago.

The lower average selling prices were due to weak demand, record high inventory levels and weaker soybean prices, which led to a 50% drop in the plantation segment’s pre-tax profit to RM73.8 million from RM147.8 million a year ago.

The downstream manufacturing segment also reported lower profit during the quarter as weaker selling prices compressed profit margins while the biotechnology segment’s losses widened in line with its research and development activities.

The others segment’s pre-tax profit fell 88% to RM2.3 million from RM18.9 million a year ago due to changes in foreign currency translation position of the group’s US dollar denominated cash reserves and borrowings arising from foreign exchange fluctuations.

The property segment was the only segment to record higher earnings, with pre-tax profit rising 21% to RM9.4 million from RM7.8 million a year ago, on the back of progressive completion of works and improved profit margins.

Genting Plantations’ revenue for the quarter fell 8.7% to RM482.34 million from RM528.42 million a year ago due to weaker palm products selling prices outweighing the increase in fresh fruit bunches (FFB) production.

Its FFB production improved 15% during the quarter underpinned by growth in its Indonesia operations, from an increase in mature areas and better age profile. Production from Malaysia operations fell due to the delayed effects of adverse weather conditions and decline in mature areas from replanting activities.

For the financial year ended Dec 31, 2018 (FY18), Genting Plantations’ net profit slumped 50.79% to RM164.9 million from RM335.09 million a year ago while revenue rose 5.2% to RM1.9 billion from RM1.81 billion a year ago.

The group declared a final dividend of 8.25 sen per share for FY18, bringing its total dividend payout to 13 sen for FY18.

For 2019, Genting Plantations said its prospects will largely be contingent on the performance of its plantation segment, which in turn reflects the movements in palm products selling prices and the group’s FFB production.

While palm prices are influenced by various factors such as supply and demand, weather patterns and currency exchange fluctuations, the group said it expects FFB production for 2019 to see further upward trajectory on prospects of higher crop output from its Indonesia operations.