KLK Q3 net profit up by 13%

PETALING JAYA: Kuala Lumpur Kepong Bhd's (KLK) net profit for the third quarter ended June 30, 2014 rose 13% to RM213.66 million from RM189.16 million a year ago, thanks to profits from its plantations improving two folds on favourable selling prices of palm products, higher fresh fruit bunch (FFB) production, and reduction in production cost.
The improved performance was on the back of revenue that increased 34.4% to RM2.92 billion compared with RM2.17 billion in the previous corresponding quarter.
The group had accounted for an impairment of RM19.8 million on the prepaid lease payments in Papua New Guinea.
In the results of the preceding year's same quarter, there was a gain of RM26.0 million realised from the disposal of shares in an associate.
KLK said output of oilseeds is anticipated to improve and as a result, supply of soft oils will be ample.
"With tougher measures being imposed on opening of letters of credit in China, the demand for palm oil therein will be affected. However, current palm oil prices trading around RM2,100 per mt, should find support on account of biodiesel demand," it said in a filing to Bursa Malaysia yesterday.
Notwithstanding the above, it said plantations profit for the current financial year is expected to exceed that of the previous financial year in view of the results achieved todate and contracted forward sales.
For the oleochemical division, margins continue to be under pressure due to the volatile raw material prices and excess capacity. This division will still expect satisfactory profits for the whole financial year on account of its better first half performance.
"Overall, the group profit for the current financial year will be better than that of last financial year."
For the nine months period, net profit went up 24.4% to RM820.95 million from RM659.74 million while revenue also rose 24.1% to RM8.35 billion compared with RM6.73 billion a year ago.