Tan Sri Dr Nik Norzrul Thani Nik Hassan Thani.
PETALING JAYA: SD Guthrie Bhd, formerly known as Sime Darby Plantation Bhd
, forecasts crude palm oil (CPO) prices will be sustained at current levels.
It also expects a satisfactory financial performance this financial year ending Dec 31, 2024 (FY24).
This is expected to be supported by strong CPO and palm kernel (PK) prices and the continued strong performance of its European downstream operations, the company said.
"CPO prices are expected to be driven by tighter supply as a result of Indonesia's prolonged adverse weather conditions impacting CPO output and the recent change in its B40 biodiesel mandate. Any further upside to CPO prices may be limited by the supply outlook and trading premiums of substitute vegetable oils," SD Guthrie said in a statement.
In its third quarter ended Sept 30, 2024, the group saw its revenue rising 10% year-on-year (y-o-y) to RM5.3bil as net profit fell 37% y-o-y to RM766mil.
The group also highlighted it registered a strong recurring profit before interest and tax (PBIT) of RM1.8bil for the year-to-date period ended Sept 30, 2024, which is a 27% y-o-y increase from the previous corresponding period.
“Strong CPO and PK prices are expected to contribute to the overall performance of the group, supported by the strong growth in downstream business that is performing well amidst global challenges," group managing director Datuk Mohamad Helmy Othman Basha said in a statement.
The group's chairman, Tan Sri Nik Norzrul Thani Nik Hassan Thani said: “SD Guthrie’s performance reflects the resilience of our global footprint and integrated operations. We will use these strong foundations to develop our new business verticals, namely the development of industrial parks and renewable energy."
The group noted its strong recurring PBIT performance was driven by the continued financial and operational improvements that were seen in the Malaysian upstream operations.
It noted that the decline in y-o-y net profit for the quarter was mainly due to one off extraordinary items booked in the previous year's quarter.
This was the disposal gain of RM600mil that was registered in the third quarter of FY23 due to the sale of 384 hectares of land located in Mukim Kapar.
Its net profit stood at RM1.39bil during the year-to-date cumulative nine-months of FY24, which was a 16% y-o-y decrease from the previous corresponding period.
"With regards to our new business verticals, the partnership announced with AME Elite Consortium Bhd to develop a green industrial park with a dedicated solar park within the Johor-Singapore Special Economic Zone reflects our progress towards expanding into industrial parks and renewable energy," Mohamad Helmy said.
"Meanwhile, there are ongoing discussions with established business partners in industrial park development in collaboration with state agencies for the development of selected land parcels throughout Malaysia. This will unlock the potential of our strategically located land assets,” he added.
