PETALING JAYA: United Plantations Bhd
posted a lower net profit of RM203.28mil for the third quarter of this year, compared with RM215.03mil in the same quarter last year despite higher revenue for the quarter under review.
The palm oil plantation company registered revenue of RM677.08mil for the third quarter, higher than the RM547.67mil for the same quarter last year.
In a filing with Bursa Malaysia, the company said the lower profit was due to refinery losses as well as the RM14.5mil non-recoverable withholding tax on a dividend received from a foreign subsidiary.
For its refinery segment, a loss before tax of RM5.7mil was recorded due to realised hedging losses through buy backs of Bursa Malaysia Derivatives futures sold earlier in a rising market.
“The stronger ringgit against the US dollar also affected the profitability of this segment during the quarter,” the company said.
However its plantation revenue rose slightly by 0.2% due to higher production.
“Crude palm oil (CPO) and palm kernel production increased by 5.4% and 3.2%, respectively, whereas the CPO and kernel average selling prices were lower by 1.3% and 5.9%, respectively,” United Plantations said.
Palm oil prices opened at RM3,947 per tonne in the third quarter before strengthening to a quarterly high of RM4,614 per tonne on Aug 19.
This was on the back of strong demand from India and China, driven by favourable price spreads against competing vegetable oils. At the end of the quarter, prices eased to RM4,351 per tonne as spreads narrowed, demand moderated, and production exceeded expectations.
Meanwhile, the company said it will remain focused on operational excellence, while driving productivity improvements through mechanisation as well as the replanting of older, less productive areas with their latest high-yielding palms.
“Maintaining high yields is viewed as the most essential aspect within our operations that will enable the company to safeguard its competitiveness amid rising labour, energy and input costs,” it said.
It also expects a supportive bias for palm oil into the fourth quarter as tightening global supplies of vegetable oils and expanding biodiesel demand are expected to partly offset the drag from elevated stock levels of palm oil.
The company added that it would remain mindful of challenges that could arise in the remainder of the year.
“However, based on the performance to date, combined with a more stable labour situation and the company’s strong commitment to achieving its budgeted crop, the board of directors maintains the expectation that the results for this year will be satisfactory.”
The company also declared an interim dividend of 30 sen per share and a special dividend of 14 sen per share for this year, which will be payable on Dec 8.
