Felda Global Ventures , the world's third-largest palm plantation operator, reported a 35 percent rise in second-quarter earnings, supported by stronger crude palm oil production following measures to boost fruit yields.

The Malaysian producer stuck to previous guidance for palm oil prices to remain solid for the rest of the year, averaging 2,400 ringgit to 2,600 ringgit a tonne on restocking in China and Indian demand for November's Diwali festival, but said palm could spike as high as 2,900 ringgit.

Palm oil is facing a production squeeze this year due to the ongoing effects of a crop damaging El Nino weather event, which brings hot, dry weather to Southeast Asia and lowers fruit yields.

"Rising commodity prices have provided optimism to the plantation's earnings outlook and we are in a good position to take advantage of the general tightness in supply," Felda Global chief executive Zakaria Arshad said in a statement.

Felda's net profit rose to 62.2 million ringgit ($15.4 million) in the quarter ended June from 46.1 million ringgit a year ago. Revenue eased slightly to 4.14 billion ringggit from 4.19 billion ringgit the previous year.

Felda, which has implemented measures to improve fruit yields, reported a 35 percent increase in yield per hectare from the previous quarter, while the average cost of crude palm oil output fell 9 percent.

"Our plantations are showing healthy recovery from El Nino where we continue to show improvement on a monthly basis. We project the next half of the fiscal year to be better," Zakaria said, referring to crude palm oil output.

Zakaria said Felda was focused on its core business and had no current plans for mergers and acquisitions. The company, which also has interests in sugar, rubber and trading and logistics, had also identified several non-core assets to divest, including a stake in an insurance company.

"We hope to conclude them by the third or fourth quarter. This will improve our balance sheet," he told a media briefing.

Felda's palm oil output was expected to face minimal impact from the annual smoke haze that affects the region due to forest fires and can lower extraction rates, a company official said.