KUALA LUMPUR — May 22, 2020: Sime Darby Plantation (SD Plantation) net profit rose to RM394 million in the first quarter ended March 31 from RM90 million a year earlier.
Revenue improved to RM3.04 billion from RM2.99 billion previously.
In a filing with Bursa Malaysia today, the company attributed its performance to higher contributions from both upstream and Sime Darby Oils (downstream) operations and lower financing costs.
SD Plantation chairman Tan Sri Abdul Ghani Othman said the continuous drive to improve operational efficiencies and reduce costs has enabled the company to capitalise on the industry’s brief respite from low crude palm oil (CPO) and palm kernel (PK) prices to record the satisfactory results for Q1 2020.
“However, the group remains cognisant that it will continue to face a challenging environment as countries around the world grapple with the spread of the COVID-19 virus and manage the economic repercussions of the pandemic,” he added.
According to Ghani, the demand for palm oil will remain intact in the long term as it is a key ingredient for food and non-food products.
SD Plantation believes that its focus on value creation strategy and prudent cost management will continue to place its operations and finances in a satisfactory position to weather future challenges.
The company has also done the assessment on the potential impact of the Covid-19 pandemic on its operations and financial performance, including rising risks of customers deferring or defaulting on contracts, customer credit risks and volatility from foreign exchange fluctuations.
On its outlook, the company’s performance for FY2020 ending Dec 31, 2020 would be impacted by the volatility of CPO and PK prices and impediment to operations, should a prolonged or worsening pandemic continue to affect global business activities.