KUALA LUMPUR: Hap Seng Plantations Holdings Bhd will focus on enhancing operational efficiency to offset rising production costs while maintaining good plantation practices to boost fresh fruit bunches [FFB] yield and extraction rates.
The group noted that the proposed minimum wage increase from RM1,500 to RM1,700 per month, effective Feb 1, 2025, will raise its production costs.
However, this impact is expected to be partially offset by the proposed RM150 increase in the windfall tax levy threshold price for Sabah, set to take effect on Jan 1, 2025.
Hap Seng Plantations said the expectation of lower palm oil production in Indonesia, higher soybean oil prices and Indonesia pushing ahead with the implementation of its B40 biodiesel mandate are expected to support the current level of crude palm oil (CPO) prices.
In the third quarter ended Sept 30, the group’s net profit jumped 46.5% to RM55.4mil compared with RM37.8mil in the same corresponding quarter, a year ago, translating into earnings per share of 6.93 sen from 4.73 sen previously.
Revenue for the quarter climbed 7.7% to RM177.2mil against RM164.5mil last year mainly due to higher average selling price and higher sales volume of all palm products.
It said the current quarter’s average selling price per tonne of CPO and palm kernel were RM4,098 and RM2,731 as compared to the preceding year corresponding quarter of RM3,924 and RM2,142 respectively.
CPO sales volume for the current quarter was marginally higher at 36,777 tonnes whilst PK sales volume was 4% higher at 8,525 tonnes as compared to the preceding year's corresponding quarter of 36,726 tonnes and 8,167 tonnes respectively.
FFB production was 12% higher in the current quarter due to seasonal yield trend and changes in cropping patterns.
For the first nine months, it recorded a 69.2% rise in net profit to RM119.6mil, alongside a 5.2% increase in revenue to RM493.3mil.
“Overall, the group expects its results for the financial year ending Dec 31, 2024 to continue to be influenced by movements in commodity prices,” the group said.
