PETALING JAYA: Kuala Lumpur Kepong Bhd
(KLK) expects its plantation segment to remain resilient and continues to be a significant contributor to overall performance.
For the third quarter ended June 30, 2024 (3Q24), KLK’s net profit more than doubled year-on-year (y-o-y) to RM240.2mil from RM84.1mil previously. Meanwhile, the group’s revenue was up by 8% y-o-y to RM5.5bil from RM5.1bil previously.
In a filing with Bursa Malaysia, KLK said the group’s plantation profit improved 46.2% y-o-y to RM1.09bil as at 3Q24 mainly attributable to higher crude palm oil (CPO) and palm kernel (PK) sales volume, stronger PK selling price realised at RM1,978 per tonne.
The company added that the improved earnings was also due to the decline in CPO production cost, lower net loss of RM3mil from fair value changes on outstanding derivative contracts and drop in fair value loss of RM9.9mil on valuation of unharvested fresh fruit bunches.
Nevertheless, KLK said the improvement in result was partially offset by a weaker CPO selling price realised at RM3,619 per tonne.
The group noted that the CPO price had retreated quite substantially to about RM3,800 per tonne.
Meanwhile, KLK’s major shareholder, Batu Kawan Bhd, also registered a 58% y-o-y rise in net profit in 3Q24, to RM131mil. Revenue increased by 6.2% to RM5.7bil for the quarter under review.
In a filing with the local bourse, Batu Kawan said the group’s plantation segment is the major contributor to the group's results with a year-to-date pre-tax profit of RM1.11bil, driven by productivity and operational enhancements.
Although CPO prices have since dropped to the RM3,800 per tonne level, the group expects its plantation segment to continue to contribute significantly to its overall profitability.
Moreover, Batu Kawan’s manufacturing segment has reported a substantial drop in year-to-date pre-tax profit to RM159.7mil, mainly due to losses recorded by oleochemical sub-segment in Europe by higher utilities costs and high-interest rate operating environment; and overcapacity in the refining sector which squeezed refining margins.
Nonetheless, the group said some improvement in the oleochemical sub-segment is expected in the near term.
