KUALA LUMPUR (May 29): Genting Plantations Bhd (KL:GENP) reported on Wednesday a 10.37% increase in its first quarter net profit on higher palm product prices, which offset the impact of lower sales volume in the downstream manufacturing segment.

Net profit for the three months ended March 31, 2024 (1QFY2024) climbed to RM42.83 million or 4.77 sen per share, from RM38.81 million or 4.33 sen per share a year earlier, the group’s bourse filing showed.

Revenue grew 3.69% to RM605.84 million, from RM584.25 million in 1QFY2023.

The group did not declare any dividend for the quarter.

Genting Plantations said it is expecting continued growth in the production of fresh fruit bunches (FFB) throughout the remaining months of the year, which will be supported by additional harvesting areas and the progression of existing mature areas into higher-yielding brackets in Indonesia.

“Nevertheless, the ongoing replanting activities in Malaysia may have a moderating effect on the group’s production growth,” it flagged.

During the quarter, FFB production in Indonesian estates improved due to their favourable age profile and expanded harvesting area. The group achieved marginally higher crude palm oil (CPO) average price at RM3,643 per tonne, and palm kernel prices at RM2,011 per tonne.

“CPO prices remained well supported during the quarter, following flattish growth in global palm oil supply and declining inventory levels,” Genting Plantations said. Still, the support on CPO prices was capped by the pressure from a narrower price spread between palm oil and other edible oils, it noted.

For its property segment, Genting Plantation said it will continue targeting a broad-based market by diversifying its property offerings.

Meanwhile, its agtech (agricultural technology) segment, whose activities relate to genomics research and development, remains focused on innovation, leveraging big data, artificial intelligence and precision agriculture, the group said.

“The segment will focus on broadening the application of biological solutions, superior planting materials and advanced technologies such as automation and digital solutions across the group,” it added.

Genting Plantation said its downstream manufacturing segment is anticipated to continue facing stiff competition from Indonesian counterparts that are benefitting from competitive pricing for feedstock due to the imposition of export levies.

Genting Plantations’ shares closed unchanged at RM6 on Wednesday, giving the group a market capitalisation of RM5.38 billion.