SD Plantation FY21 net profit jumps 90 pct to RM2.26 bln

KUALA LUMPUR: Sime Darby Plantation Bhd’s (SDP) net profit jumped 90 per cent to RM2.26 billion for the financial year ended Dec 31, 2021 from RM1.18 billion last year on higher crude palm oil and palm kernel prices.

Better oil extraction rates, which compensated for lower fresh fruit bunch (FFB) production, also contributed.

Revenue surged to RM18.69 billion versus RM13.08 billion while its basic earnings per share stood at 32.60 sen from 17.20 sen, the company told Bursa Malaysia.

The planter has approved a final dividend of 12.38 sen per share for the financial year.

Together with the interim dividend of 7.90 sen per share paid on Nov 12, 2021, this would translate into a single tier dividend of 20.28 sen per share for the financial year ended Dec 31, 2021, to be paid on May 17 this year.

Group managing director Mohamad Helmy Othman Basha said although the group closed the financial year 2021 with an outstanding set of results, the path ahead remains challenging.

“On Jan 28, 2022, the United States Customs and Border Protection (USCBP) issued a finding that certain SDP palm oil products are produced using convict, forced or indentured labour.

On Jan 28, 2022, the United States Customs and Border Protection (USCBP) issued a finding that certain SDP palm oil products are produced using convict, forced or indentured labour.

Mohamad Helmy Othman Basha

“Though the finding came as a disappointment, we are forging ahead to address all the challenges, keeping the welfare and wellbeing of our workforce our top priority,” he said in a separate statement.

Mohamad Helmy noted that while the group has embarked on reimbursing recruitment fees and related costs to current and past foreign workers that might have been charged by third-party agents in source countries, it is also looking forward to the completion of the independent assessment on its Malaysian operations.

The group has implemented several measures to improve its existing governance structures, policies and procedures. SDP would also be looking to continue to address the current acute labour shortage by reducing its dependence on manual labour.

Its focus on the mechanisation, automation and digitalisation of its plantation operations will be another top priority in 2022 as the company look towards reinventing the nature of work in plantations and intensifying efforts to recruit more local workers.

On its outlook for the year, SDP expects palm oil prices to remain elevated, at least throughout the first half of 2022 “as supplies are only anticipated to increase in the second half of the year in line with the high-crop season.”

“With the recent decision by the Malaysian government to lift the freeze on the intake of foreign workers which has been in place since June 2020, the group is cautiously optimistic that this may provide further support for its FFB production, particularly from its Malaysian operations to increase in the second half of the year, in line with palm oil’s typical peak production period,” the company said.

“The group expects its performance for the financial year ending Dec 31, 2022 to be satisfactory.” — Bernama