Hap Seng Plantations 3Q net profit down 15%

by **Cals** Wed 27 Nov 2013, 00:16

Business & Markets 2013

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Tuesday, 26 November 2013 19:42

KUALA LUMPUR (Nov 26): Hap Seng Plantations Holdings Bhd posted a net profit of RM30 million for the third quarter, down 15% year on year.

3QFY13 revenue fell to RM115 million from RM149 million in 3QFY12.

The net profit for the nine months to September 2013 decreased to RM58 million from RM110 million in the previous corresponding period.

Revenue for 9MFY13 also fell to RM301 million from RM391 million in 9MFY12.

The group cited the lower average selling price of crude palm oil (CPO) and palm kernel (PK) as reasons for the decrease in revenue for the third quarter.

“Nevertheless, the adverse impact from the lower selling price was partially offset by lower production cost per tonne of CPO which benefitted mainly from higher production of fresh fruit bunches (FFB) and CPO,” said Hap Seng in its filing to the bourse.

Looking forward, the group expects its performance to be satisfactory for the balance of FY2013, as production slows down due to the monsoon season which may support CPO prices.

“Demand for palm oil on the other hand is expected to increase in view of the upcoming Chinese New Year with China, the world’s second-biggest palm oil buyer, likely to begin re-stocking its palm oil stocks ahead of this festive period,” said the group.

The group added that the super typhoon Haiyan that hit the Philippines may severely reduce coconut oil supply in the region, thereby supporting demand for palm kernel oil which will also support palm kernel prices.