KUALA LUMPUR: United Plantations Bhd (UPB) registered a lower net profit of RM159.01 million for the second quarter (Q2) that ended on June 30, 2023 (FY23), from RM185.72 million a year ago.
The oil palm plantation company also posted lower revenue of RM470.07 million, which dropped by 32.96 per cent against RM701.25 million from last year.
UPB's earnings per share stood at 38.34 sen for Q2 FY23, down from 44.51 sen previously.
For the cumulative period, the company posted a higher net profit of RM271.10 million compared to RM244.32 million a year ago.
UPB revenue for the period was lower by 30.8 per cent to RM930.06 million compared to RM1.34 billion from the previous year.
In a Bursa Malaysia filing, the company said the lower revenue was due to the decrease in revenues for the plantation and refinery segments by 11.5 per cent and 37.3 per cent, respectively.
On a segmental basis, the company registered lower revenue for plantations due to lower crude palm oil (CPO) and palm kernel production and a lower average price.
"The factors above, together with higher costs of production in the current period as a result of higher fertiliser inputs, higher minimum wages and the new collective agreement, which was
concluded in the second half of 2022, resulting in a decrease of the profit before tax of this segment by 23.3 per cent in the current period compared to the corresponding period," it said.
The refinery division's revenue decreased by 37.3 per cent to RM602.6 million from RM960.8 million a year ago.
This is due to lower prices of CPO and crude palm kernel oil (CPKO).
UPB is focusing on the effort to combat challenges such as the rising cost of energy, fertilisers, chemicals, building materials and spare parts despite being down from earlier highs.
"Whilst labour shortages and field operations have improved significantly with the reopening of borders and an inflow of guest workers, special attention is being focused on the importance of up-skilling new guest workers to achieve higher productivity and yields," it said.
The company intends to pursue continued mechanisation efforts and replant the older and less productive oil palm stands to take full advantage of its latest superior planting materials produced at its research department.
