KUALA LUMPUR: Malaysia's Sime Darby Plantation reported a second consecutive quarterly net profit on Wednesday (Aug 18), on higher palm oil prices, and said that it expects prices - which have scaled record highs in recent weeks - to remain firm.
Its net profit rose to 617 million ringgit (US$145.78 million) for the April-June period, from 378 million ringgit a year ago. Improved production in its Indonesian operations also aided the upbeat results.
Revenue at the world's largest palm planter by land size rose 37 per cent to 4.41 billion ringgit (US$1.04 billion).
The company, in a bourse filing, said it expects a "promising" performance for the financial year ending Dec 31.
"The Group is on track to achieve its financial targets for the financial year 2021, despite the challenges posed by the COVID-19 pandemic and the national level lockdown," Chairman Megat Najmuddin Megat Khas said.
Plantations in Malaysia have been hit by a prolonged labour shortage that have clipped output, but Sime Darby said the impact is expected to be mitigated by higher palm fruit production in its Indonesia and Papua New Guinea operations due to better weather conditions.
"Thus, fresh fruit bunch production for the financial year 2021 is expected to remain comparable to FY2020," the firm said.
"With the continued impact of labour shortages on Malaysia's crude palm oil production as well as tight global vegetable oil inventory levels, the Group expects prices to remain firm," it added.
Malaysia's benchmark crude palm oil price climbed to a record high last week due to tightening global edible oil supplies. It traded at 4,331 ringgit (US$1,023.27) a tonne by Wednesday afternoon.