KUALA LUMPUR, Feb 18 (Reuters) - Malaysia’s Sime Darby Plantation flipped to a profit in the fourth quarter and is optimistic for a good performance this year as crude palm oil prices are expected to rise, it said in a stock exchange filing on Thursday.
The world’s largest palm oil planter by land size posted a net profit of 149 million ringgit ($36.91 million) for the Oct-Dec period, versus a net loss of 58 million ringgit in the year earlier quarter.
Revenue rose 8% to 3.64 billion ringgit.
The company said continuing operations showed improved recurring profit before interest and tax, while discontinued operations recorded an impairment loss of 236 million ringgit in a joint venture.
A higher price of crude palm oil and a stronger contribution from the company’s downstream segment compensated for the production impact from a labour shortage in Malaysia and extreme weather conditions, it added.
Sime Darby Oils, the downstream segment, benefited from improved margins and lower production cost, it said.
The firm had proved able to navigate the effects of extreme weather, the coronavirus pandemic and a labour shortage, said group managing director Mohamad Helmy Othman Basha.
“While the group continues to mitigate these challenges in 2021, one of our immediate priorities is to allay the concerns of our stakeholders over the Withhold Release Order issued recently by U.S. customs,” he said.
In December, the United States banned palm imports from Sime Darby over accusations of forced labour used in production, prompting some global palm oil buyers to drop it from supply chains.
The firm said it was working with independent bodies to tackle the accusations.
Sime Darby is “cautiously optimistic” of satisfactory overall performance this year, spurred by forecasts for higher crude palm prices, it added. ($1=4.0370 ringgit) (Reporting by Mei Mei Chu; Editing by Clarence Fernandez)