KUALA LUMPUR (Feb 22): Hap Seng Plantations Holdings Bhd's net profit grew 21% to RM44.97 million in the fourth quarter ended Dec 31, 2016 (4QFY16), from RM37.04 million a year ago, boosted by higher revenue and lower operating expenses.

A filing with Bursa Malaysia showed its quarterly revenue rose 7% to RM128.54 million from RM120.2 million.

It proposed a second interim dividend of 8 sen per share for FY16, payable Mar 23.

Hap Seng Plantations said it registered higher profit before tax (up 39% year-on-year) and profit after tax (up 29% y-o-y) on the higher revenue and lower manuring costs with higher fertilizers application in the preceding quarters ahead of the year-end wet weather conditions.

The revenue increase was due to higher average selling price realisation of crude palm oil (CPO) and palm kernel although offset somewhat by lower sales volume of both CPO and palm kernel.

For the full year (FY16), Hap Seng Plantations' net profit surged 27% to RM124.11 million, compared to RM96.45 million in FY15, while revenue climbed 16% to RM503.43 million from RM434.88 million.

Hap Seng Plantations said Malaysia's palm oil production last year fell 13% to 17.32 million tonnes from 19.96 million tonnes in 2015 due to the prolonged effects of the El Nino weather phenomenon, with palm oil inventories closing at 1.77 million tonnes at end of 2016, the lowest recorded since 2011.

"This has somewhat supported the current palm oil prices which are expected to remain strong in the first half of the year as global palm oil inventory level is forecasted to be low, caused by the lower palm oil production as well as the implementation of mandatory biodiesel programmes in Malaysia and Indonesia," it added.

However, Hap Seng Plantations warned that prices may be lower in the second half of 2017 as production recovers.

"In spite of the lower price outlook in the second half of 2017, the group is optimistic of achieving satisfactory results for the current FY17," it added.

Shares of Hap Seng Plantations closed 3 sen or 1.15% higher at RM2.65 today, for a market capitalisation of RM2.13 billion.