SIME Darby, Malaysia’s top oil palm grower by market value, said quarterly net profit slumped 85 per cent as palm oil prices more than halved from last year’s record highs of RM4,486. Chief executive Datuk Seri Ahmad Zubir Murshid said in a statement today that Sime Darby would use its balance sheet to acquire undervalued assets, but did not elaborate.
The company said its industrial and property divisions were recovering, but its plantation business faltered due to the drop in crude palm prices and lower production as a result of biological tree stress.
Sime Darby, valued at about US$11.8 billion, said January-March net profit fell to RM165.68 million from RM1.11 billion a year earlier.
IOI Corp, Malaysia’s No.2 palm oil producer, said its January-March net profit slumped 97 per cent on the fall in prices, weaker output and foreign currency losses.
Singapore-listed Wilmar earlier this month said net profit grew 11 per cent as higher refining and trading margins offset lower revenues, and said it was optimistic about sustained demand from China and India.
Malaysian palm oil firms are more vulnerable to falling CPO prices than Singapore rivals as they are mostly operating in the upstream industries that supply palm oil to refineries.