That said, earnings should be lifted in 2HFY2023 as productivity improves and costs moderate, the analysts highlight.
Analysts at RHB Bank Singapore and Maybank Securities are keeping their “neutral” rating on the plantation sector, expecting earnings to decline further q-o-q and y-o-y in 2QFY2023.
In their June 13 report, RHB analysts Hoe Lee Leng and Syahril Hanafiah note that 1QFY2023 reporting season for the sector saw disappointing earnings. Four planters booked below-expectations numbers, two posted in-line results, while only one came in above forecasts. The disappointing results were mainly due to higher-than-expected unit costs and lower-than-expected palm kernel prices.
