KUALA LUMPUR (AFP) – Malaysia’s Sime Darby said Thursday its net profit for the October-December quarter fell by nearly half to 437.4 million ringgit ($121 million), due to weak prices during the period and unfavourable weather.
Some of Malaysia’s worst flooding in decades hit northern parts of the country in December, disrupting harvesting activities for the world’s biggest listed palm-oil producer by acreage.
Sime Darby had achieved profit of 818.3 million ringgit in the same period a year earlier.
Group Chief Executive Mohamad Bakke Salleh said the period was “challenging on the back of tough market conditions.”
“The sharp decline in crude oil prices and slowdown in global economic growth have exacerbated the need to push for greater productivity and cost efficiency,” he said in a statement.
One of the most versatile and cheaply produced edible oils, palm oil is a key ingredient in a vast range of products, from snack foods to shampoo to make-up.
Prices plummeted last year, however, due to higher output from competing oilseeds like soy, and in the general commodities downdraft caused by the drop in world crude oil prices.
Palm oil prices have since recovered somewhat.
Sime Darby’s revenue increased slighty to 10.74 billion ringgit from 10.71 billion ringgit a year ago.
The company said its portfolio of diversified businesses and “stringent capital allocation” will be key for the company to ride out the present volatility.
“We believe long-term market fundamentals remain attractive despite the easing of commodity prices,” said the company’s president.