KUCHING: Sarawak Plantation Bhd (SPB) has posted remarkable earnings, with group net profit surging to RM92 million in the financial year ended December 31, 2024 (FY2024), from RM64.44 million in FY2023 — an increase of approximately RM27.56 million. This growth was driven by the improved performance of estate operations, coupled with a gain on fair value changes in biological assets.
This was despite a decline in group revenue to RM551.4 million from RM570.7 million recorded in FY2023.
The company’s earnings per share grew to 32.98 sen from 23.1 sen. SPB will double its dividend payment to 20 sen per share, up from 10 sen per share in FY2023.
In FY2024, SPB’s group pre-tax profit surged to RM124.4 million (FY2023: RM87.4 million), in line with an increase in operating profit to RM106.2 million (RM91.8 million), coupled with a gain on fair value changes in biological assets of RM18.1 million, compared to a loss of RM4.4 million in the preceding year.
The group’s oil palm business comprises estate and mill operations.
“During the current financial year, estate operations recorded segment revenue and segment profit of RM262.3 million and RM95.3 million, respectively, whereas mill operations recorded segment revenue and segment profit of RM497.9 million and RM21.3 million, respectively.
“Revenue from the oil palm operations decreased by RM19.3 million to RM550.5 million in the current financial year, compared with RM569.8 million reported in the preceding year. The decline was mainly due to lower sales volumes of crude palm oil (CPO) and palm kernel (PK), despite higher realised average selling prices for both CPO and PK.
“Sales volumes of CPO and PK decreased by approximately 14.0 per cent and 17.3 per cent, respectively. However, the average selling prices of CPO and PK increased by approximately 9.0 per cent and 29.4 per cent, respectively, for the current financial year,” SPB stated in explanatory notes to its financial results.
Year-on-year, the company recorded a higher pre-tax operating profit (after deducting administrative and finance costs) of RM105.1 million, compared to RM90.5 million in FY2023.
In 4Q2024, SPB reported stronger earnings, with group net profit rising to RM16.2 million (4Q2023: RM8.74 million), despite a decline in revenue to RM143.6 million (RM159.2 million).
“During the current interim quarter, estate operations recorded segment revenue and segment profit of RM80.6 million and RM34.3 million, respectively, whereas mill operations recorded segment revenue and segment profit of RM125.7 million and RM4.1 million, respectively. The oil palm operations segment contributed 99.8 per cent of the group revenue of RM143.6 million.
“Revenue from oil palm operations decreased by RM15.7 million to RM143.3 million in the current interim quarter, compared with RM159.0 million in the corresponding period of the preceding year. The decline was primarily attributed to lower sales volumes of CPO and PK, which dropped by 34.6 per cent and 37.3 per cent, respectively, despite higher realised average selling prices of CPO and PK, which increased by 28.0 per cent and 66.1 per cent, respectively, during the current interim quarter.
“The operating profit before tax for the oil palm operations (after deducting administrative and finance costs) was RM32.6 million for the current interim quarter, compared to RM24.0 million in the corresponding period of the preceding year. The increase in pre-tax operating profit was in line with the stronger performance of estate operations,” SPB added.
In the immediate preceding quarter (3Q2024), SPB group delivered significantly stronger earnings, with group pre-tax profit of RM41.8 million (4Q2024: RM21.8 million), primarily due to a gain on fair value changes in biological assets of RM9.2 million, compared to a loss of RM10.9 million in 4Q2024.
Regarding prospects for FY2025, SPB stated that while the global economy remains unpredictable due to ongoing geopolitical tensions and climate change concerns, the CPO price is expected to remain stable. The price is supported by supply constraints resulting from adverse weather conditions and anticipated growing demand, driven by rising edible oil consumption and ongoing biodiesel mandates.
“The group remains focused on enhancing productivity and operational efficiency while optimising costs and maintaining a healthy financial position. In addition, it continues to invest in research and development to advance mechanisation initiatives that support long-term sustainable growth.
“Barring any unforeseen circumstances and subject to a sustainable CPO price, the board of directors anticipates achieving a satisfactory performance in the next financial year,” the company added.
