Sime Darby Plantation Berhad has announced a net profit of RM200 million for the fourth quarter of the financial year ending 31 December 2023 (4Q FY2023), contributing to a total net profit of RM1.86 billion for FY2023.
The Group’s Malaysian upstream operations witnessed a notable 45% year-on-year (YoY) increase in Fresh Fruit Bunch (FFB) production during 4Q FY2023, attributed to intensive rehabilitation efforts and the gradual return of foreign harvesters to Malaysia. This robust performance resulted in a 15% YoY increase in overall FFB production for the Group during 4Q FY2023 and a 6% YoY increase for FY2023.
Despite lower average realized crude palm oil (CPO) and palm kernel (PK) prices recorded in 4Q FY2023, the higher overall FFB production helped offset the impact. CPO prices experienced an 8% YoY decline to an average of RM3,688 per metric ton (MT), while average realized PK prices marginally decreased by 1% YoY to RM1,742 per MT.
Sime Darby Oils (SDO), the Group’s downstream operations, witnessed a significant two-fold increase in its profit before interest and tax (PBIT) to RM183 million in 4Q FY2023, driven primarily by strong performance in its European operations, which mitigated lower margins in its Asia Pacific operations.
Looking forward to FY2024, the Group anticipates steady CPO demand in the long term, despite potential short-term impacts from seasonally high stockpiles in key destination countries and geopolitical risks. Unpredictable weather conditions globally may raise concerns for vegetable oil supply, thereby providing support for CPO prices in 2024.
With improved labor conditions and continued rehabilitation efforts in its Malaysian upstream operations, the Group remains optimistic about sustaining FFB production growth in 2024. Additionally, the Group is actively seeking strategic collaborative opportunities to advocate for positive industry changes while focusing on sustainability, operational excellence, and innovation for long-term success.
The Group has declared a final dividend of 6.05 sen per share for FY2023, bringing the total single-tier dividend to 15.00 sen per share, including interim and special interim dividends. Barring unforeseen circumstances, the Group maintains a positive outlook for FY2024
