PETALING JAYA: Sime Darby Plantation Bhd (SDP) has warned that shortage of migrant workers continues to disrupt its harvesting activities in Malaysia, where fresh fruit bunch (FFB) production is anticipated to be lower this financial year (FY22) compared with FY21.
Group managing director Mohamad Helmy Othman Basha said SDP’s Malaysian operation is facing a shortage of 4,189 harvesters or 38% of a requirement of 11,159 harvesters, which affects its oil extraction rates.
“If (the shortage of harvesters) remains constant at 4,000 for a full year, you’re going to lose 1.2 million tonnes, as 4,000 workers harvest 60,000ha a year,” he said at a briefing on SDP’s financial results for the second quarter ended June 30, 2022 (Q2’22) today.
He added that production capacity will not stabilise until it resolves the shortage of harvesters problem, which is anticipated by the first half of 2023.
“Currently we are at 16.5ha per worker because of the shortage that we are facing, compared with the supposed industry standard of 8-9ha. We have doubled down on steps to mechanise, automate and digitalise work that is traditionally performed manually to address the issue,” he explained.
Already, the group’s total FFB output fell 2% to 9.13 million tonnes in FY21, dragged mainly by weaker FFB output in Malaysia, arising from the labour shortage. Its Malaysian FFB production fell 6% to 4.63 million tonnes last year.
Meanwhile, the group’s net profit for Q2’22 increased 31.6% to RM812 million from RM617 million in the same quarter last year on the back of upstream and downstream performance as well as non-recurring profit from the disposal of land.
Revenue grew 26.7% to RM5.59 billion from RM4.41 billion last year’s corresponding quarter.
Buoyant crude palm oil (CPO) and palm kernel (PK) prices continued to support the group’s year-on-year performance. In Q2’22, average realised CPO and PK prices increased 44% and 40% respectively to RM5,213 and RM3,339 a tonne.
The group’s downstream operator, Sime Darby Oils, registered a profit before interest and tax of RM243 million in Q2’22, a 66% increase compared with Q2’21, attributable to better margins recorded by its Asia-Pacific operations which mitigated the lower margins in its European operations as well as lower overall sales volume.
The group’s better performance was supported by non-recurring profit of RM232 million on disposal of Ladang Bukit Kerayong in Malaysia to the government.
For the six months period, SDP’s net profit grew to RM1.53 billion from RM1.18 billion last year as revenue increased to RM9.97 billion from RM8.08 billion.
The group declared an interim dividend of 10 sen per share for FY22.
