Plantation players’ earnings to improve in H2

BIMB Securities noted that there could be some margin improvement in the second half of the year (H2) earnings due to improvements in FFB production and the higher expected palm product prices achieved compared to last year.

PETALING JAYA: High operational costs coupled with suppressed profit margins on lower-than-expected production and sales volumes would weigh on the earnings of plantation companies this year.

BIMB Securities Research has made earnings downgrades on almost all companies under its coverage, considering the lower average selling prices of palm products, fresh fruit bunches (FFB), crude palm oil (CPO) production as well as downstream margins on lower sales volume and higher costs expected.