KUALA LUMPUR: United Plantations Bhd
believes it is shaping up to be a very satisfactory year, based on current palm oil prices and the company's efforts to secure the budgeted crop in the final quarter of 2023.
The plantations firm announced in a stock exchange filing its third-quarter net profit, which rose to RM235.68mil from RM196.72mil in the year-ago quarter.
This represented an earnings per share of 56.82 sen, up from 47.43 sen.
It said revenue fell to RM540.16mil in the quarter under review, down from RM649.62mil in the previous corresponding quarter.
The board of directors declared an interim dividend of 40 sen per share to be paid on Dec 14, 2023.
Over a nine months basis, the company's net profit was RM506.79mil, up from RM441.05mil in the same period in 2022 while revenue dropped to RM1.47bil from RM1.99bil on the back of lower palm kernel (PK) prices.
The average price of PK was significantly lower at RM1,968 per tonne, which was a 32.3% drop from the previous year., while average crude palm oil price at RM3,927 per tonne was 2.3% higher than previously.
According to United Pantations, its income tax expense during the period was 20% lower than in the year-ago period because of the one-off Prosperity Tax in 2022.
Despite its optimism for the final quarter of 2023, the company said it is mindful of the challenges that persist.
These include higher inflation and recession fears combined with global conflict in Ukraine and the Middle East.
"These conflicts will need to be monitored closely as they will have an impact on global trade and supply chains," said the company in a stock exchange filing.
United Plantations said the prices of energy, fertilisers, chemicals, building materials and spare parts remain above levels experienced a few years earlier, resulting in cost of production rising to its highest levels on record.
Subsequently, the company is addressing the surge in its cost base by investing in means to increase our overall productivities and yields all of which are bearing fruit.
"Whilst labour shortages and field operations have improved significantly with the reopening of borders, special attention as well as resources are being directed towards focusing on up-skilling and on-boarding our new guest workers failing which productivities and field losses will increase.
"In this connection, management will relentlessly continue to direct further attention towards implementing greater levels of mechanization combined with efforts to execute and complete our replanting program thereby taking full advantage of our latest high yielding planting materials produced at our research department," it said.
