Kuala Lumpur, 30 August 2019 – For the six months ended 30 June 2019, Sime Darby Plantation (SD Plantation) Group reported net earnings of RM101 million, representing a 64 percent decrease against the corresponding period of the previous year. Improvements from a 4 percent year-on-year (YoY) rise in fresh fruit bunch (FFB) production, increase in oil extraction rate (OER) at 21.34 percent, as well as higher earnings from its recently rebranded Downstream segment, Sime Darby Oils (SDO), were not sufficient to mitigate the adverse impact of weaker crude palm oil (CPO) and palm kernel (PK) prices realised, which declined by 16 percent YoY from RM2,414 per MT to RM2,016 per MT and by 41 percent YoY from RM1,897 per MT to RM1,116 per MT respectively.
For the second quarter of its financial year ending 31 December 2019 (Q2 FY2019), the Group reported net earnings of RM27 million against net earnings of RM30 million in the corresponding quarter of the previous year. The current quarter continued to be adversely affected by weak CPO and PK prices, but partially cushioned by lower finance costs with the capitalisation of higher borrowing costs and lower net tax resulting from the recognition of deferred tax assets on losses suffered by some subsidiary companies. The average CPO price realised declined by 15 percent YoY from RM2,379 per MT to RM2,021 per MT whilst the average PK price realised was lower by 39 percent YoY from RM1,682 per MT to RM1,020 per MT.
The Group’s FFB production of 2.43 million MT in Q2 FY2019 was comparable to the same quarter of 2018 of 2.44 million MT. It also recorded an improvement in OER from 21.11 percent to 21.27 percent. Nevertheless, the Group’s earnings continued to be negatively impacted by weaker CPO and PK realised prices.
Read the full Press Release HERE