United Plantations Bhd (UP) reported a 17% increase in net profit to RM185.94 million for the second quarter ended June 30, 2024 (2QFY2024), up from RM159.02 million in the same period last year.

This growth was driven by higher profits from both its plantation and refinery segments. Earnings per share also saw a rise to 44.83 sen compared to 38.34 sen in 2QFY2023.

The company's quarterly revenue climbed 16% to RM546.08 million in 2QFY2024 from RM470.07 million a year earlier. This uptick was primarily attributed to increased revenue from its plantation and refinery operations, largely due to higher prices of crude palm oil (CPO) and palm kernel (PK).

Despite the robust financial performance, United Plantations did not propose an interim dividend for 2QFY2024.

For the first half ended June 30, 2024 (1HFY2024), the company's net profit surged 18% year-on-year to RM318.81 million, up from RM271.11 million. Revenue for the period rose 10% to RM1.02 billion compared to RM930.06 million in 1HFY2023.

In its filing with Bursa Malaysia, the company highlighted that palm oil prices in 2QFY2024 ranged from RM3,767 to RM4,443 per tonne and closed at RM4,000 per tonne by the end of June. Factors such as lower-than-expected production in Malaysia and Indonesia, weather-related concerns, and increased demand from China contributed to this price movement.

Looking ahead, United Plantations noted that the performance in the upcoming months, traditionally peak production periods, will depend on production levels in Malaysia and Indonesia and any significant changes in stock levels. The company remains cautiously optimistic about the global economic outlook for the remainder of 2024 but acknowledges potential challenges such as geopolitical conflicts and their impact on global supply chains.

Management emphasized ongoing efforts to enhance yields, reduce costs, and improve productivity through mechanization initiatives and replanting activities. These measures are crucial amid expected pressures from rising costs of labor, energy, and materials.

Based on current palm oil prices and efforts to secure the anticipated crop for the rest of the year, United Plantations anticipates satisfactory results for the financial year ending December 31, 2024 (FY2024).

On Wednesday, United Plantations' shares closed unchanged at RM24.98, maintaining a market capitalization of RM10.4 billion. Year-to-date, the stock has appreciated by 39.87%, reflecting investor confidence in its performance and strategic initiatives.