KLK 2Q net profit soars 50%, declares 15 sen dividend

by **Cals** Fri 23 May 2014, 00:10

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 22 May 2014 09:51

KUALA LUMPUR: Kuala Lumpur Kepong Bhd’s (KLK) net profit soared 50% to RM314.6 million in the second quarter ended March 31, 2014 (2QFY14) from RM209.7 million a year ago, due to improvement in its revenue.

Revenue for 2QFY14 jumped 31.2% to RM2.93 billion from RM2.24 billion.

KLK declared an interim dividend of 15 sen per share for the financial year ending Sept 30, 2014 (FY14).

In a filing with Bursa Malaysia yesterday, the plantation group said its plantations profit soared 50.6% to RM288.5 million in 2QFY14 from RM191.6 million a year ago, on account of better realised selling prices of crude palm oil (CPO) and palm kernel (PK).

Its manufacturing sector’s profit surged 69.7% to RM137.7 million from RM81.2 million, on the back of a 27.9% rise in revenue to RM1.49 billion from RM1.17 billion a year ago.

However, KLK saw its property sector’s profit plunging 45.8% to RM8.4 million in 2QFY14 from RM15.5 million a year ago, due to the drop in progressive recognition of profits from projects in Bandar Seri Coalfields in Sungai Buloh, Selangor.

For the six-month period ended March 31, 2014 (6MFY14), net profit was RM607.3 million versus RM470.6 million in the previous corresponding period, while it registered revenue of RM5.43 billion against RM4.56 billion a year earlier.

KLK said its plantations profit for 6MFY14 climbed 17.7% year-on-year (y-o-y) to RM545.2 million from RM463.1 million, which was largely attributed to the favourable selling prices of CPO and PK despite lower crop production of both fresh fruit bunches and rubber.

As for its property sector, KLK said profit fell 40.4% to RM21.6 million on the back of lower revenue of RM48.9 million, as well as a decline in profits from the Bandar Seri Coalfields project.

Looking ahead, KLK said palm oil prices are currently trading in the range of RM2,500 to RM2,600 per tonne, underpinned by current low levels of stock and increased initiatives in bio-diesel usage in Malaysia and Indonesia.

It said production may be affected if the El Nino weather phenomenon and the sub-normal monsoon in India materialise.

“In view of the above factors and the prevailing palm product prices that will remain volatile, the plantation profit for the current financial year is anticipated to be higher than that of the previous financial year,” said KLK.

This article first appeared in The Edge Financial Daily, on May 22, 2014.