KLK said its management is fairly confident that FY25 will be a promising year.
PETALING JAYA: Kuala Lumpur Kepong Bhd
’s (KLK) fourth-quarter net profit slumped by over 94% year-on-year (y-o-y), dragged down by a RM180mil impairment at a London-based associate and an inventory write-down of RM50.8mil.
The plantation giant told the bourse that its net profit fell to RM6.77mil in its fourth quarter ended Sept 30, 2024 (4Q24) compared with RM116.31mil in the previous corresponding quarter.
Apart from its revenue that dropped by 1.7% y-o-y to RM5.68bil, KLK was also impacted by a RM180mil impairment in its 26.9%-owned Synthomer Plc and a RM50.8mil inventory write-down arising from KLK Hardwood Flooring Sdn Bhd.
Both are one-off financial items.
Syntomer is a producer of high-performance, highly specialised polymers and ingredients for a broad range of applications.
The company’s product categories cover adhesives, coatings, construction, health and protection, performance materials, energy solutions, and paper, carpet and foam.
Established in 1992 KLK Hardwood Flooring is a manufacturer of engineered hardwood flooring.
The company offers products in markets such as Australia, New Zealand, Europe, the United States, Canada, Middle East, South Africa, and Asia.
KLK said its plantation business’ profit before tax (PBT) in 4Q24 improved 26.2% y-o-y to RM526.9mil, on the back of stronger crude palm oil (CPO) and palm kernel prices, lower CPO production costs and a higher fair-value gain of RM37.6mil on valuations of unharvested fresh fruit bunches.
Its manufacturing segment narrowed its losses substantially to RM9.9mil, while the property segment’s PBT in 4Q24 declined 43.4% y-o-y to RM8.3mil.
Meanwhile, the investment holding and others segment saw its pre-tax loss widening to RM308.2mil from a loss of RM86.2mil in 4Q23.
One of the factors was its share of equity losses of RM48.4mil from Synthomer.
The loss reported by Synthomer was mainly caused by its weak performance coupled with non-operating charges incurred on amortisation of acquired intangibles and restructuring costs.
With the reduced bottomline, KLK’s earnings per share fell to 0.60 sen. The group did not declare a dividend for the quarter under review.
Cumulatively, for its financial year 2024 (FY24), the group’s net profit dropped by 29.2% y-o-y to RM590.96mil, while revenue also declined by 5.8% y-o-y to RM22.27bil.
Had it not been for the exceptional losses from Synthomer and KLK Hardwood, KLK said its net profit would have been RM957.5mil in FY24.
“Management is fairly confident that FY25 will be a promising year. The upstream segment is expected to perform well, supported by strong palm oil prices and continuous improvements from the oleochemical sub-segment,” it said.
KLK’s financial results for 4Q24 and FY24 took a toll on its single-largest shareholder, Batu Kawan, which reported a net loss of RM19.76mil in the July to September quarter.
Batu Kawan’s revenue also fell by 2% y-o-y to RM5.88bil.
In FY24, the group’s net profit declined by 39.1% y-o-y to RM298.86mil while revenue fell 6.5% y-o-y to RM24.65bil.
Batu Kawan has a 47.9% stake in KLK.
