PETALING JAYA: United Plantations Bhd’s net profit surged 52% in the second quarter ended June 30 from last year, driven by increased production as well as higher crude palm oil (CPO) and palm kernel (PK) prices.
The planter, however, warned that the recovery in the palm oil output during the second half of the year would not be as large as it had previously expected.
“The main risk for a lower production than initially anticipated is mainly continued labour shortages, especially the workforce assigned to crop harvesting and evacuation, which undoubtedly would have a negative impact on all plantation companies during the forthcoming peak crop expected in July-September 2017,” it said.
In a filing with Bursa Malaysia yesterday, the oil palm planter said its net profit grew to RM109.75mil from RM72.35mil a year ago.
Its revenue for the quarter jumped almost 30% to RM355.3mil from RM277.7mil previously.
Cumulatively, for the first half of 2017, United Plantations posted a 42% increase in net profit to RM187.4mil from RM132.1mil a year ago.
Revenue for the period rose 37% to RM734.5mil from RM537.3mil previously.
The company, which operates oil palm plantations in Malaysia and Indonesia, saw its CPO and PK production jumping by 22.5% and 22.1% in the first six months of the year compared to the corresponding period in 2016.
The company also saw a lower cost of production of CPO and PK during the period, which decreased by 21.6% and 4.1%, respectively.
“On average, the CPO price for the group in the current period was 13% higher than the corresponding period, whereas the average PK price was 66.1% higher in the same period,” United Plantations said.
As the result of the higher production and higher CPO prices, it said the CPO windfall gain tax incurred for the period at RM4.7mil was higher than the RM0.46mil incurred in the corresponding period in 2016.