KUALA LUMPUR, May 7 : Malaysia’s SD Guthrie, one of the world’s largest palm oil producers, said on Thursday it was cautious on its outlook for the year, while reporting a slightly lower first-quarter net profit, due to weaker crude palm oil and palm kernel prices.
The company’s net profit declined 1 per cent to 560 million ringgit ($143.41 million) for the January-March period from 567 million ringgit a year ago, while revenue declined 3 per cent to 4.69 billion ringgit.
The firm cited a volatile and policy-sensitive operating environment for its cautious outlook, although its industrial development and renewable energy segments are expected to support longer-term earnings resilience and diversification.
“While market conditions remain unpredictable, the team is focused on what we can control – productivity, quality and costs – to sustain and build upon last year’s strong performance,” Group Managing Director Mohd Haris Mohd Arshad said in a bourse filing.
The company’s shares rose 0.16 per cent to 6.17 ringgit at the midday break.
Crude palm oil prices in the first quarter traded about 4,115 ringgit a ton, according to the company.
Malaysia’s benchmark crude palm oil prices have climbed 10 per cent to 4,559 ringgit a ton since the U.S.-Israel war on Iran broke out at the end of February.
The company, based in Kuala Lumpur with operations in Indonesia, Papua New Guinea and Solomon Islands, said crude palm oil prices are expected to remain elevated in the near term, on the back of weather-related supply risks and the Middle East conflict.
“The expansion of regional biodiesel mandates will structurally support CPO prices in the near term but uncertainties persist around the implementation readiness to support these mandates,” the company added.
Malaysia announced that the country will begin producing biodiesel with a mix of 15 per cent palm oil, hence called B15, in June, while Indonesia has said that it will implement its B50 biodiesel mandate in July.
($1 = 3.9050 ringgit)
