KUALA LUMPUR: Hap Seng Plantations Holdings Bhd’s net profit for the financial year ended Dec 31, 2022 (FY2022) fell six per cent to RM210.31 million from RM224.02 million in the same period for FY2021.
Revenue, however, increased to RM814.55 million against RM670.85 million previously.
In a filing with Bursa Malaysia, the oil palm plantation company said the drop in net profit was attributed to higher production costs which were adversely affected by higher fertiliser and diesel costs, and an increase in the minimum wage.
"There was also the loss from fair value adjustments of biological assets of RM29.2 million compared with a gain of RM23.8 million in the preceding year, mitigated by higher average selling prices of all palm products,” it said.
For the fourth quarter (4Q) ended Dec 31, 2022, Hap Seng’s net profit was down to RM18.87 million versus RM94.31 million in the previous corresponding quarter.
Revenue for 4Q also narrowed by 21 per cent to RM143.55 million compared with RM194.82 million, mainly affected by the lower average selling price of all palm products.
On current year’s prospects, Hap Seng said Malaysia’s crude palm oil (CPO) production in January 2023 was 14.7 per cent lower month-on-month at 1.38 million tonnes, the lowest in nearly a year.
"Palm oil exports plummeted by 23 per cent to 1.14 million tonnes affected by lower shipments to China and India,” it said.
At the end of January 2023, the country’s palm oil inventories increased 3.3 per cent month-on-month to 2.27 tonnes.
"With the seasonal low fresh fruit bunches (FFB) production expected in the 1Q 2023 and pent-up demand for the forthcoming Ramadan month, Malaysia’s palm oil inventories are expected to decline by the end of the 1Q 2023,” it said.
Hap Seng said plantation industry analysts expect CPO prices in the 1Q 2023 to range between RM3,500 to RM4,500 per tonne.
CPO prices in the near term are expected to be influenced by concerns of global supply risks of vegetable oils with the seasonal lower CPO production in 1Q 2023, lower soybeans production due to the ongoing drought in Argentina, lower sunflower seed oil production affected by the ongoing Russian-Ukraine war.
"Prices also would be affected by the tightening of palm oil export policy by Indonesia with effect from Jan 1, 2023, and Indonesia raising its biodiesel mandate from B30 to B35 with effect from Feb 1, 2023,” it added.
Hap Seng said its results for FY2023 to be influenced by movements in commodities prices, rising production costs and uncertainties in the global economies. - Bernama
