KUALA LUMPUR: Sarawak Oil Palms Bhd's net profit of RM291.6 million for the financial year 2023 (FY23) beat expectations, said RHB Research. 

The research house said the net profit accounted for 117 and 128 per cent of its and street full-year forecasts, respectively. 

"The deviation was mainly due to stronger-than-expected palm kernel (PK) prices and volumes and lower-than-expected production costs," it said in a note.

Meanwhile, on cost assumption, RHB Research believes the fourth quarter (Q4) 2023 unit costs have decreased quarter on quarter (QoQ) on the back of lower operating costs, due to lower fertiliser application activities in Q4. 

Regardless, the firm said Sarawak Oil has managed to apply the amount of fertilisers close to 100 per cent of its FY23 requirement. 

"As it has likely finished applying the high-priced fertilisers in 2023, we anticipate fertiliser prices for 2024 to be 15–30 per centlower year on year (YoY). 

"We make no changes to our cost assumption of MYR2,000/tonne for FY24, as we have already imputed the decrease in fertiliser prices.

"Maintain Buy with a new target price of RM3.20 from RM2.95," it added.