Hap Seng Plantations’ Q3 bottom line sags

PETALING JAYA: Hap Seng Plantations Holdings Bhd’s net profit for the third quarter ended Sept 30, plunged 90.1% to RM3.6 million from RM36.43 million in the same quarter last year on lower fresh fruit bunches production and unit production cost of crude palm oil per tonne, which was partly offset by tax benefit derived from the investment tax allowance on the group’s biogas plant.

Revenue for the quarter under review, fell 42.25% to RM65.58 million from RM113.58 million due to lower average selling prices and sales volume of crude palm oil (CPO) and palm kernel.

Commenting on the prospects, the group’s board of directors said global macroeconomic factors affecting the palm oil market will continue to influence the group’s prospects for the current financial year ending Dec 31.

Based on that, the group’s results for the current financial year ending Dec 31 are expected to be materially lower than the previous financial year.

Palm oil prices are expected to remain low, weighed down by high inventories amidst a seasonally high cropping season in the fourth quarter and current low prices of competing vegetable oils particularly soybean oil.

At the end of October, palm oil inventories in Malaysia was at 10-month high of 2.72 million tonnes.

Palm oil production is projected to rise in the last quarter of the year in line with the seasonal trend which may further increase inventories.

For the nine-month period, Hap Seng Plantations net profit fell 73.46% to RM23 million from RM86.78 million due to lower average selling price and sales volume of CPO and palm kernel.