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Hap Seng Plantations Q1 net profit soars 246 pct on higher CPO, PK prices

25/05/2022 06:49 PM

KUALA LUMPUR, May 25 (Bernama) -- Hap Seng Plantations Holdings Bhd’s net profit surged 246 per cent to RM101.67 million in the first quarter ended March 31, 2022 (Q1 2022) from RM29.37 million in Q1 2021, against the backdrop of higher crude palm oil (CPO) and palm kernel (PK) prices.

Revenue nearly doubled to RM242.15 million in the quarter under review from RM121.32 million previously, as a result of higher average selling prices realisation as well as higher sales volume of all palm products.

“Average selling price of CPO and PK for the current quarter at RM6,019 per tonne and RM4,702 per tonne respectively were significantly higher than the preceding year corresponding quarter of RM3,854 per tonne for CPO and RM2,585 per tonne for PK.

“CPO sales volume in Q1 2022 at 33,607 tonnes was 28 per cent above the preceding year’s corresponding quarter, whilst PK sales volume was eight per cent higher at 7,319 tonnes, mainly attributed to higher CPO and PK production and favourable inventory movements in the current quarter,” the company said in a filing with Bursa Malaysia today.

It said CPO and PK production in Q1 2022 were higher by six per cent and seven per cent respectively from Q1 2021, due to higher fresh fruit bunches (FFB) production, as well as higher CPO and PK extraction rates.

“FFB production for the current quarter was five per cent higher than the preceding year corresponding quarter with higher FFB yield due to seasonal yield trend and changes in cropping patterns,” it said.

On prospects, Hap Seng Plantations cited palm oil industry analysts as saying that CPO prices are expected to remain buoyant at the current level in the near term, supported by the global shortages of edible oils and the geopolitical tension in Europe, but prices are expected to moderate in the second half of 2022.

“The favourable impact from the strong CPO prices will however be dampened by the rising prices of fertilisers and fuel, coupled with the increase in minimum wage under the Malaysian Minimum Wage Order 2022 effective May 2022, which will push production costs higher,” it said.

Based on the foregoing, the group expects its results for the financial year ending Dec 31, 2022 to be influenced by movements in commodities prices, rising production costs, the geopolitical tension in Europe, and uncertainties in the global economies as the world shifts from the COVID-19 pandemic to endemic stage.




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