HLIB Research said JPG’s 1H24 core net profit of RM96.6mil came in broadly within its expectation, at 45.2% of its full-year estimate.
PETALING JAYA: Newly listed Johor Plantations Group Bhd (JPG) is expected to record a better performance in the second half of 2024 (2H24) on the back of seasonally stronger fresh fruit bunches (FFB) production.
Hong Leong Investment Bank (HLIB) Research said JPG’s 1H24 core net profit of RM96.6mil came in broadly within its expectation, at 45.2% of its full-year estimate.
“Second quarter of 2024’s core net profit of RM50.5mil took 1H24’s total sum to RM96.6mil, accounting for 45.2% of our full-year estimate.
“We consider the results broadly within our expectation, as we anticipate 2H24 to come in stronger on the back of seasonally higher FFB production,” the research house said in a report yesterday.
HLIB Research said the group’s 1H24 core net profit of RM96.6mil was arrived after adjusting for RM10.9mil fair value gain on biological assets, and RM7.7mil of listing expenses.
On a quarter-on-quarter basis, higher sales volume and realised palm product prices, coupled with lower crude palm oil (CPO) production cost, which more than mitigated higher finance cost, drove JPG’s 2Q24 core net profit higher by 9.5% to RM50.5mil.
“On a year-on-year basis, the group’s 2Q24 core net profit more than tripled to RM50.5mil boosted mainly by higher sales volume (due to favourable weather condition, which in turn led to higher output) and realised palm kernel (PK) price, as well as lower finance cost,” the research house said.
Meanwhile, year-to-date, JPG’s 1H24 core net profit surged to RM96.6mil mainly due to higher sales volume of CPO and PK (as a result of favourable weather condition), higher realised PK price, lower CPO production cost and finance cost.
HLIB Research said the management is keeping to their annual replanting target of 4% (of its planted area) for the financial year 2024 (FY24) to FY25, and will accelerate its replanting programme to 7% per annum from FY26.
“The group has no plans to venture into other renewable energy businesses, at least for now. Management shared that the plantation business will remain as its mainstay and it has no intention to venture into other renewable energy businesses (apart from biomass generated from its biogas plants),” the research firm said.
JPG declared first interim dividend per share of 1.25 sen (going ex on Sept 4, 2024 and payable on Sep 24, 2024)
HLIB Research maintained a “buy” call on JPG with a target price of 99 sen.
