United Plantations set on remaining competitive
Chairman Datuk Mohamad Nasir Abdul Latif believes two key themes will likely shape the global economy in 2025, namely the normalisation of inflation rates and the loosening of monetary policy.
Both of these, he said, should offer some support to gross domestic product growth.
'Nevertheless, central banks remain cautious about loosening policies too rapidly as inflation is stickier than expected, which could indicate that rates may stay higher for longer,' he said in the company's annual report.
'Furthermore, the escalating conflicts in the Middle East and Ukraine as well as the slowdown in the Chinese economy may provide setbacks in global trade, which in turn would impact the supply and demand equation for vegetable oils, hereunder palm oil,' Mohamad Nasir added.
He noted that the recent price increase in vegetable oils should not be taken for granted.
'In the United Plantations Group we will therefore continue to focus on raising productivity and cost efficiencies to remain competitive when prices head south again.
'With the board and management's focus I am confident that we will remain alert and adapt to the changing environment by having an open mind, remaining agile and by having the courage to innovate and stimulate progress whilst ultimately preserving our core values,' he said.
Reflecting on the past year, Mohamad Nasir said the global economy led by the United States has been resilient amidst an environment of high interest rates introduced to curb inflation.
Commenting on the group's performance, Mohamad Nasir said United Plantations has remained resilient amidst the global uncertainty and achieved a new record after-tax profit of RM719mil for the financial year 2024.
'This represents an increase of RM8mil equal to a 1.1% improvement when compared with the result of RM711mil in 2023.
'This record result was primarily driven by the higher commodity prices achieved by United Plantations, along with the continued efforts of our estates to optimise yields wherever possible using our in-house high-yielding planting materials and by further strengthening and implementing our proven management practices.'
Separately, he said the group's plantations in Indonesia were significantly compounded by weather conditions during the year, where rainfall on most of its estates was 50% to 60% higher than the norm.
'This and others resulted in our production declining 11% in 2024 compared to 2023, thus impacting the overall group production for the year.'
He added that the group's downstream refinery sector also encountered challenges in 2024.
This was mainly in the form of increased competition from Indonesia and margin pressure.
'Even so, we achieved a commendable result, driven by our unwavering commitment and focus on high quality and sustainability, which has ensured stability and sustained partnerships with both local and global customers,' he said.
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