PETALING JAYA: Kuala Lumpur Kepong (KLK) Bhd’s net profit for its first quarter ended Dec 31, 2019 declined 33.3% to RM167.2 million from RM250.9 million previously, dragged by the manufacturing and farming segments as well a drop in corporate income.
Segmentally, plantation profit climbed 23.7% year on year (yoy) to RM157.7 million underpinned by favourable crude palm oil (CPO) selling prices of RM2,207/metric ton (MT) and a fair value gain of RM11.7 million on valuation of unharvested fresh fruit bunches.
The group’s property segment reported a 22% increase in profit to RM13.6 million on the back of a higher revenue of RM52.2 million.
The manufacturing segment fell 18.4% to RM80 million, with revenue declining 12.8% to RM1.926 billion from RM2.2 billion a year ago, owing to lower selling prices.
The farming sector’s profit fell sharply to RM8.1 million, attributable to substantial drop in crop production as a result of lower yield and smaller cropped area.
Meanwhile, corporate income experienced a shortfall of RM13.2 million due to a decrease in foreign currency exchange gain arising from translation of inter-company loans denominated in foreign currencies, and no surplus from government acquisition of plantation land.
KLK’s revenue for the quarter also declined to RM4.08 billion, from RM4.09 billion a year ago.
Looking ahead, KLK said the group expects profit to improve for FY20 ending Sept 30, subject to uncertainties arising from the global outbreak of Covid-19.
“Prevailing CPO and palm kernel prices have improved over those of last financial year, supported by declining CPO inventories and production. In view of this, plantation profit is expected to be higher for FY20.
“Oleochemical division continues to face keen competition and higher raw material costs,” it said.
Meanwhile, KLK’s parent company Batu Kawan Bhd saw a 24.3% fall in net profit to RM103.43 million for the first quarter ended December 31, 2019 against RM136.67 million in the same quarter a year ago.
Revenue was flat at RM4.21 billion against RM4.22 billion previously.
