For the third quarter ended Sept 30, 2021, the plantation group recorded a net profit of RM610mil, which was more than three times the net earnings of RM190mil in 3QFY20.
In a statement, it said realised CPO and PK prices during the quarter rose 51% and 66% to an average of RM3,770 and RM2,274 per metric tonne respectively due to a CPO supply crunch triggered by labour shortage issues.
According to the group, the continued upward trend in palm prices and a higher oil extraction rate more than compensated for the lower fresh fruit bunch production
Revenue for the quarter was RM5.06bil, which was 59% higher than RM3.18bil in the previous corresponding quarter.
In the upstream segment, profit before interest and tax (PBIT)surged 234% to RM913mil due to the jump in CPO and PK prices.
However the downstream business, Sime Darby Oils, saw a decline in PBIT to RM7mil from RM71mil due to lower profits generated by its Asia Pacific operations.
For the fourth quarter of 20201, the group expects palm oil prices to remain elevated before a possible downward adjustment in 2Q 2021 when supplies are expected to improve.
It remains optimistic that the high prices will offset the impact of labour shortages in the group's Malaysian upstream production.
"The Group expects demand to remain strong as more countries ease their Covid-19 restrictions, bringing back earlier suppressed demand.
"Barring any unforeseen circumstances, the Group expects an overall strong financial year performance for 2021," it said.
On the need for automation and digitalisation, Sime Darby Plantation group managing director Mohamad Helmy Othman Basha said the pandemic has put the spotlight on the need to accelerate the transformation of plantation operations to reduce the dependence on manual labour.
"We are determined to make plantations work less arduous, but more efficient and productive for our workers.
"We are also intensifying our efforts to recruit more local workers. As we progress further with our mechanisation initiatives, we expect to attract more Malaysians who are highly skilled,” he said.
Over the nine months to Sept 30, 2021, Sime Darby Plantation recorded a net profit of RM1.79bil, which was 72.68% improved over RM1.04bil in the same 2020 period.
Revenue rose 39.22% to RM13.15bil from RM9.4bil in 9MFY20