The improvement is attributed to a buoyant crude palm oil (CPO) and palm kernel (PK) market.
Revenue for the quarter rose 19% to RM4.38 billion from RM3.67 billion reported previously.
The group said realised CPO prices in 1Q2022 averaged at RM4,465 per metric tonne (pmt), a 40% increase year-on-year (yoy) compared to RM3,185 pmt, previously.
On the other hand, PK prices increased by 84% yoy to RM4,105 from RM2,230 pmt.
SDP said the higher average realised prices compensated for lower fresh fruit bunch (FFB) production as the group continues to experience the impact of the prolonged labour shortage in the Malaysian palm oil industry.
At the same time, it also saw a decline in its Indonesian FFB production.
For the quarter, the group’s downstream segment, Sime Darby Oils reported a 23% increase in PBIT to RM132 million compared to RM107 million reported in the same quarter of the previous year on the back of higher margins by its Asia-Pacific bulk operations which partially mitigated lower sales volumes and margins in its Asia-Pacific differentiated and European operations.
SDP chairman Megat Najmuddin Megat Khas attributed the solid results to the continuing high commodity prices caused by ongoing supply chain disruptions.
“As palm oil plays a crucial role in fulfilling the demand for vegetable oils in the global market, I am confident that SDP will be able to leverage on current opportunities and continue to deliver an encouraging performance in 2022,” he said in a statement.
On its ongoing issue with the US Customs and Border Protection (CBP), group managing director Mohamad Helmy Othman Basha said it submitted a comprehensive report to the agency on April 26, 2022 to address the requirements of the US import regulations and international labour standards.
“We will continue to give our full cooperation as we work towards modifying (uplifting) the finding,” he said
As for its outlook, the group believes that while the current high prices may have an impact on demand, this will be mitigated by the tight supply and availability of alternative vegetable oils as well as supply chain disruptions caused by the ongoing Russia-Ukraine conflict.
For 2022, it anticipates lower overall FFB production against the previous year, as the intake of new foreign workers for the plantation industry is only expected to arrive in the second half of the year.