The research firm expects a mixed performance in SDP’s earnings and headline earnings per share for the financial year 2022 (FY2022) and FY2023, estimated at +13%/-11% to RM2.6 billion/RM2.3 billion and 36.9 sen/32.9 sen respectively, following the one-off gain from the disposal of agricultural land in Kapar.

“The 11% drop in FY2023 earnings was mainly due to the recent adjustment based on new average crude palm oil (CPO) price of RM3,500 per tonne, as well as lowered assumption in production and margin.

“Operationally, based on the back-of-the-envelope calculations, we find that the disposal of Kapar land (Bukit Keratong Estates) would not have a significant impact on its fresh fruit bunch (FFB) production since the landbank size proportion is only 1% of Selangor area or 0.1% of oil palm hectarage area in the peninsula,” MIDF Research said in a research note today.

Hence, it makes no changes in forward estimates.

In a filing with Bursa Malaysia yesterday, SDP said it is disposing of three parcels of land in Klang, Selangor to Sime Darby Property (Bukit Tunku) Sdn Bhd for RM618 million.

It said the proceeds to be derived from the proposed disposal will be utilised for working capital requirements.

At the lunch break, SDP shares climbed 11 sen to RM4.52, with 1.01 million shares transacted.

SDP’s net profit fell 34.98% to RM396 million for the third quarter ended Sept 30 (Q3 FY2022), from RM609 million a year earlier, on lower earnings from its upstream segment, but partially mitigated by improved downstream operations.