United Plantations Berhad (2089) Q4 2023 earnings summary

Executive summary

• FY2023 net profit reached a record RM711.0m, up 17.4% YoY; higher commodity prices, improved yields and downstream performance supported results.

• Revenue fell 19.9% to RM2,014.2m, mainly due to lower market prices affecting refinery sales, while profit before tax rose 10.3% to RM933.5m.

• CPO production rose 4.6% to 265,973 tonnes and average CPO yield increased 3.7% to 6.11 MT/ha.

Financial highlights

• Revenue RM2,014.2m, down 19.9%; operating profit RM897.2m, up 8.9%; profit before tax RM933.5m, up 10.3%.

• Net profit RM711.0m, up 17.4%; RM707.8m attributable to equity owners; EPS 171 sen, up 17.9%.

• Excluding prior-year one-offs, comparisons also reflect the 2022 RM45m prosperity tax and RM24.7m reimbursement of past Guest Worker recruitment fees; both were absent in 2023.

• Group assets were RM3,263.6m and equity RM2,867.4m at year-end; cash and cash equivalents were RM634m, versus RM779m in 2022.

Outlook and guidance

• 2024 global growth is forecast to slow to 2.4% from 2.6% in 2023, with weaker demand potentially pressuring vegetable-oil prices.

• Expected high labour, energy, fertiliser, chemical and building-material costs reinforce focus on yield, productivity, cost efficiency and pragmatic mechanisation.

• Management expects satisfactory 2024 performance, while monitoring weather and El Niño, biodiesel expansion and global demand for vegetable oils.

• Replanting older palms with improved planting material and continued mechanisation are central to productivity plans.