Highlight KLK 3Q profit jumps 13% to RM213.7m on higher palm oil price, FFB production

by **Cals** Wed 20 Aug 2014, 22:26

Highlight KLK 3Q profit jumps 13% to RM213.7m on higher palm oil price, FFB production

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Wednesday, 20 August 2014 18:52

KUALA LUMPUR (Aug 20): Kuala Lumpur Kepong Bhd’s (KLK) net profit jumped 13% to RM213.7 million in the third quarter ended June 30, 2014, from RM189.2 million in the previous corresponding quarter.

The higher net profit was mainly underpinned by higher palm oil price and higher higher fresh fruit bunches (FFB) production.

Revenue leapt 34.4% to RM2.92 billion from RM2.18 billion in the same quarter a year ago.

In a statement to Bursa Malaysia, the plantation giant said its plantation segment's profit improved two folds to RM229.8 million from RM114.8 million in the previous same quarter.

KLK said this was due to favourable selling prices of palm products, higher FFB production and a reduction in production cost.

On the manufacturing sector, the group said profit slipped to RM66.5 million compared to RM69.1 million a year ago. Its oleochemical division also posted marginally lower profit of RM65.9 million versus RM67.9 million a year ago.

KLK also said it had accounted for an impairment of RM19.8 million on the prepaid lease payments in Papua New Guinea.

For the nine-month period, net profit rose to RM820.9 million from RM659.7 million a year ago, while revenue generated was RM8.35 billion from RM6.73 billion.

KLK said the higher net profit was on account of better crude palm oil (CPO) selling price and sharply higher palm kernel selling price.

It added FFB production had increased slightly, while CPO production cost fell.

The group said its manufacturing segment posted a profit of RM284.2 million, which was 32.5% above that of the corresponding period last year.

Furthermore, the oleochemical division's profit of RM276.7 million had exceeded the preceding year's profit by 29.6%.

“Overall, the group’s profit for the current financial year will be better than that of the last financial year,” said KLK on current year prospects.

“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 metric tonne, should find support on account of biodiesel demand,” it said.

Meanwhile, the holding company of KLK, Batu Kawan Holdings Bhd, reported its third quarter net profit was positively flat at RM110.53m from RM110.51 million a year ago.

But revenue surged 33.8% year-on-year to RM3.02 billion from RM2.26 billion.

For the nine-month period, Batu Kawan recorded net profit of RM430.7 million versus RM358.3 million in the previous corresponding period, while revenue raked in RM8.63 billion from RM6.96 billion a year ago.