Genting Plantations’ Q3 net profit down 23.6%

PETALING JAYA: Genting Plantations Bhd’s net profit for the third quarter fell 23.6% to Rm17.9mil, while revenue contracted marginally to Rm475.3mil.

In a filing with Bursa Malaysia, the group said the weaker performance for the three-month period ended Sept 30, 2019 was primarily due to the lower contribution from its property developments, which are at their early stages of construction.

Revenue from the plantation and downstream manufacturing segments, however, improved on account of higher fresh fruit bunch (FFB) production and better sales volume of derivative palm products.

For the first nine months of the year, revenue climbed 14% to Rm1.6bil, while net profit fell 46.6% to Rm80.36mil.

The increase in revenue, the group said, was underpinned by a higher volume of sales from the downstream manufacturing segment.

The plantation segment, however, posted lower year-on-year (y-oy) revenue, as the impact of the softer palm product prices outstripped the higher crop output.

Its property segment also recorded lower y-o-y revenue despite registering higher sales, due to the early stages of construction of its property developments.

Looking ahead, the group said its plantation segment is expected to derive higher palm product prices for the quarter ending Dec 31, 2019 compared to the nine-month period.

This, it said, would be on the back of an improved market outlook from an anticipated tightening of palm oil supply and increasing demand, particularly from the biodiesel mandates in Indonesia and Malaysia.

Genting Plantations expects FFB production growth to extend into the fourth quarter, supported mainly by its Indonesian operations with additional mature areas and better age profile.

However, it said the group’s crop output in the fourth quarter is expected to be moderated by the impact of the dry weather conditions that hit its operations across Malaysia and Indonesia for the most part of 2019.