KL Kepong net profit jumps 9% to RM186m

PETALING JAYA: Oil palm plantation company Kuala Lumpur Kepong Bhd (KL Kepong) saw its net profit for the last quarter (Q4) ended Sept 30, 2015 jump 9.14% to RM186.3 million, compared with RM170.7 million in the previous corresponding quarter, on favourable fair value changes.
Revenue for the quarter climbed 41% to RM3.93 billion, from RM2.78 billion a year ago.
In a filing with Bursa Malaysia yesterday, the group said its plantation business dropped 24.2% to RM766.8 million, due to lower selling prices of commodities realised and increase in crude palm oil (CPO) cost of production.
However, it said, the unrealised gain of RM32.5 million from the fair value changes on outstanding derivative contracts had mitigated the reduction in profit.
Commenting on its prospects, KL Kepong said the current palm oil price has been affected by high stocks, ample supply of competing oils and the levy of US$50 (RM219.5) per tonne on CPO in Indonesia.
However, it said the weak ringgit has lent support to the price, adding that at the prevailing price, performance of the plantation sector for financial year 2016 will continue to be challenging.
KL Kepong said the outlook for its oleochemical division will continue to be pressured by the difficult business environment.
However, it said, with new plant capacities coming on stream together with the continuous drive for operational efficiency and productivity improvement, it expects the oleochemical division’s profit for FY16 to be favourable.
“The group’s profit for financial year 2016 is expected to be satisfactory,” it added.
KL Kepong has proposed to pay a final single-tier dividend of 30 sen a share for FY15, which will be paid on March 15, 2016. This will be lower than the 40 sen paid in FY14.
For FY15, KL Kepong’s net profit decreased 12.3% to RM869.91 million, against RM991.7 million previously, while revenue was up 22.6% to RM13.65 billion, compared with RM11.13 billion last year.
Earnings per share in the last quarter amounted to 17.5 sen.