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Revenue, however, increased by 60.9 per cent to RM642.91 million from RM399.65 million previously due to increases in revenues for the plantation and refinery segments by 38 per cent and 67 per cent respectively in the current quarter, the oil palm plantation company said in a Bursa Malaysia filing. — Bernama pic
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KUALA LUMPUR, April 26 — United Plantations Bhd’s (UP) net profit for the first quarter ended March 31, 2022 (Q1 2022) eased to RM59.69 million from RM74.83 million in the same period last year.
Revenue, however, increased by 60.9 per cent to RM642.91 million from RM399.65 million previously due to increases in revenues for the plantation and refinery segments by 38 per cent and 67 per cent respectively in the current quarter, the oil palm plantation company said in a Bursa Malaysia filing.
In the near term, the company expects prices to continue to trend higher due to the Ukraine invasion by Russia, with concerns that the global vegetable oil supply will remain tight, combined with demand from India and China picking up when they replenish their national inventories.
Another factor supporting palm oil prices is the continued labour shortages experienced in Malaysia.
“If the government does not provide an urgent yet safe avenue to recruit guest workers, it will become impossible to avoid serious crop losses in 2022 as the acute labour shortage has now reached a breaking point in several plantation companies,” said UP.
UP considered the Covid-19 pandemic and the acute labour shortage as primary risks to manage in 2022.
A new and just as serious risk which has surfaced following the Ukraine invasion is disruptions in the supply chain. From a big picture perspective, the Ukraine war has brought forth “fundamental aspect impacting supply and demand (complexities) of various key commodities” because Russia is a key supplier of crude oil, natural gas, fertilisers and wheat, and Ukraine, wheat and oilseeds.
“However, with UP´s positive liquidity and conservative capital resources, the board believes that the company, based on the present fundamentals, will be able to perform satisfactorily without the need for any asset impairments arising from the current global market developments,” said UP.
Results for the financial year are expected to be satisfactory and better than in 2021. — Bernama