KUALA LUMPUR, Feb 28 (Reuters) - Malaysia’s Sime Darby Plantation Bhd swung to a loss in its fourth-quarter as discontinuing operations dragged on its performance, it said in a stock exchange filing on Friday.
Sime last year disposed of its Liberia operations, which Group Managing Director Mohamad Helmy Othman Basha called “a legacy issue that has hampered the group’s financial performance”. It completed the exit in January.
The world’s largest palm oil planter by land size said lower fresh fruit bunch production and contribution from its downstream business also hurt its result.
There was, however, some cushioning from higher crude palm oil prices realised and lower finance and tax costs during the October-December period.
The group logged a net loss of 45 million ringgit ($10.6 million) over the three months, versus 129 million ringgit profit from a year earlier. Revenue fell 3.5% to 3.4 billion ringgit.
Sime said expectations of slowing crop production in Malaysia and Indonesia this year have led to a recovery in prices of palm products, but the upward trend is expected to be moderated by concerns of the coronavirus outbreak’s impact on global economic growth.
“We are cognizant that factors beyond our control, such as the recent outbreak of the Covid-19 in China, may have negative implications on global economic growth and demand for palm oil,” Chairman A. Ghani Othman said.
The firm also expected India’s restrictions on imports of refined palm oil to have a negative impact on the industry, he added.
Exports to palm’s largest destination markets India and China have fallen sharply following New Delhi’s import curbs on refined palm oil, while the coronavirus outbreak in China continues to keep disrupt economic activity.
Benchmark palm oil prices were last down 3.54% at 2,372 ringgit a tonne. ($1 = 4.2350 ringgit) (Reporting by Mei Mei Chu and Liz Lee; Editing by Stephen Coates)