Sime Darby Plantation’s Q2 net profit tumbles 53% to RM380mil

Sime Darby Plantation’s upstream division was impacted by a drop in production of fresh fruit bunches and reduced oil extraction rates in Q2 FY2023.

For the cumulative six-month period ending June 30, net profit slumped 71% to RM449 million from RM1.53 billion the previous year while revenue fell 16% to RM8.37 billion from RM9.97 billion a year ago.In a separate statement, SDP said the average realised prices for CPO in Q2 FY2023 stood at RM3,765 per metric tonne , reflecting a 28% year-on-year drop from RM5,213 per MT in the same period last year.

The decrease in FFB production was attributed to the group’s fast-tracked replanting initiative in Indonesia aimed at rejuvenating low-yield and mature palm sections using more productive planting materials. “Average interest rate was 5.1% per annum, as compared to 2.4% per annum in the corresponding quarter,” it added.Looking ahead, the group anticipates ongoing price fluctuations in the short term due to geopolitical tensions and global macroeconomic factors, further contributing to existing uncertainties.

“The group is optimistic that its FFB production will improve, as it continues to improve field conditions in its Malaysian operations,” it said.Group managing director Mohamad Helmy Othman Basha said the arrival and upskilling of new harvesters will put the harvesting operations and field conditions back on track to deliver better productivity for the rest of the year.

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