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Malaysia's Sime Darby Q2 profit doubles on higher palm oil prices
February 27, 2017 / 6:21 AM / 9 months ago

Malaysia's Sime Darby Q2 profit doubles on higher palm oil prices

KUALA LUMPUR, Feb 27 (Reuters) - Malaysia’s Sime Darby Bhd , the world’s largest palm oil planter by land size, on Monday said its second-quarter net profit more than doubled from a year ago, buoyed by improved production and higher prices of the tropical oil.

Profit at Sime Darby, a conglomerate with interests in industrial equipment, motors, property and logistics, rose to 644 million ringgit ($145.01 million) for the quarter ended December, from 285 million ringgit a year ago.

Revenue came in at 12.3 billion ringgit, versus 11.8 billion ringgit over the three months to December 2015, underpinned by higher crude palm oil (CPO) prices.

Benchmark Malaysian palm oil futures surged 18 percent over the last three months of 2016, hitting a four-year high of 3,202 ringgit per tonne at one point.

“The (CPO) price increase was mainly driven by an industry-wide production deficit due to the lingering effects of 2015’s El Nino weather phenomenon,” Sime Darby said in a statement filed to the local stock exchange.

The weather event, which brings scorching heat across Southeast Asia, curbed palm yields in top growers Indonesia and Malaysia last year. But, output is now picking up as indicated by a 5 percent year-on-year growth in Sime Darby’s production of palm fresh fruit bunches (FFB) in the second quarter.

The gain was led by an FFB production growth of 21 percent in Sime Darby’s New Britain Palm Oil, its estate in Papua New Guinea, In Malaysia and Indonesia, Sime Darby saw FFB production rise 0.3 percent and 4 percent, respectively.

Sime Darby shares were down 0.1 percent at midday break, versus a 0.2 percent gain in the benchmark stock index.

For the full statement: ($1 = 4.4410 ringgit) (Reporting by Emily Chow; Editing by Himani Sarkar)

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