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Genting Plantations Expects Palm Oil Prices to Be Supported by Higher Demand


Genting Plantations Bhd’s prospects for 2023 will track the performance of its plantation segment, which in turn depends on the movements in palm products prices and its fresh fruit bunches (FFB) production.


“In the short term, the group expects palm oil prices to remain supported by increased demand due to widened discount against other edible oils and increased allocation for Indonesia’s biodiesel mandate, whilst incremental supply is expected to decline in line with the slowdown of expansion of new plantings in recent years,” it said in a statement.


For 2023, Genting Plantations anticipates an improvement in FFB production, spurred by additional harvesting areas and the progression of existing mature areas into higher-yielding brackets in Indonesia, barring any weather anomalies.


Meanwhile, the production growth may be moderated by ongoing replanting activities in Malaysia.


On its property segment, the group will continue to offer products which cater to a broader market segment. It said patronage of the Premium Outlets is expected to recover to pre-pandemic levels.


The AgTech segment will continue to be innovative to expand the application of biological solutions, superior planting material, automation, mechanization and digitalization solutions at the group’s estates with the goal of improving operating efficiency, enabling traceability and enhancing sustainability.


Meanwhile, the downstream manufacturing segment is anticipated to face stiffer competition from its Indonesian counterparts which enjoy competitive pricing for feedstock due to price differential arising from the imposition of export levy.


For the fourth quarter ended Dec 31, its net profit fell 65.4% to RM55.86mil, or earnings per share of 6.23 sen while revenue was lower by 26.1% to RM791.2mil.


In 2022, Genting Plantations’ net profit rose 9.1% to RM471.4mil while revenue grew 1.9% to RM3.2bil.


“The board of directors has declared a final single‐tier dividend of 4.0 sen per ordinary share for FY22. The board also declared a special single-tier dividend of 15.0 sen per ordinary share.


“Total dividend (including the interim dividend of 15.0 sen) for FY22 will amount to 34.0 sen per ordinary share. In comparison, the total dividend amounted to 30.0 sen for FY21,” it said.


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