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KUALA LUMPUR, Feb 16 -- Sime Darby Plantation Bhd’s (SDP) move to reimburse recruitment fees to its current foreign workers is a step in the right direction and shows its commitment to address lapses in past recruitment practices, Maybank Investment Bank (Maybank IB) said.
The investment bank, in a note today, said the move would also institute necessary changes to prevent a recurrence in the future.
“Pending its upcoming results release this week, we are keeping our earnings per share forecasts,” it added.
SDP will announce its fourth quarter financial performance on Feb 18.
On Tuesday, SDP announced that it has made several changes and improvements to its governance structures, policies and procedures to ensure that the group’s operations are free of the scourge of forced labour.
The group is planning to reimburse 15,078 current foreign workers with an aggregate sum of RM38.6 million and it is also setting aside a sinking fund amounting to RM43.4 million to reimburse 19,565 former foreign workers.
All reimbursements will be paid in a single lump sum payment to foreign workers who come from Indonesia, India, Bangladesh, Nepal, Myanmar, Cambodia, Sri Lanka, and Pakistan
Lauding the move, Public Investment Bank Bhd said it should help shape up SDP’s environmental, social and governance rating.
“With its fourth quarter of financial year 2021 results expected to be released on Feb 18, we do not rule the possibility of earnings surprise, given the stronger-than-expected crude palm oil price performance,” it added.
Public Investment Bank maintains its “neutral” call on SDP with an unchanged target price of RM4.12.
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