Kim Loong Resources double Q1 net profit on better plantation operations

PETALING JAYA: Kim Loong Resources Bhd managed to double first quarter net profit for the quarter ended April 30, 2017, on both higher fresh fruit bunch (FFB) production and price.
The company made a net profit of RM24.3 million for the quarter compared with RM12.4 million for same corresponding quarter in 2016.
This was on 43% higher revenue of RM255.65 million, compared with RM177.7 million for the same quarter in 2016. The company's share price closed up 2 sen to RM3.82 yesterday.
The FFB production for the current quarter was 88,300 metric tonne (MT), 68% higher than that recorded in the first quarter of last financial year, contributed by estates in the Keningau region which showed a 90% increase over the production in the last financial year.
About 50% of the group's planted mature area is located in the Keningau region. It did not face problems selling its FFB production as most of the produce was supplied to mills within the group.
The average FFB price was about 17% higher for the current quarter.
The plantation operations performance managed to make up for a 23% dip in profits of the palm oil milling operations caused by lower oil extraction rate as well as stiff competition for crops resulting in a squeeze in processing margin despite a higher quantity processed.
For the financial year ending Jan 31, 2018, the company expects its FFB production to be potentially 20% higher on young mature areas and strong FFB yield recovery in Keningau region. In terms of CPO production, Kim Loong expects slightly higher FFB intake of 1.2 million MT for the year compared with the 1.15 million MT seen in the financial year 2017.
"Subject to the fluctuation in the Ringgit currency and volatility of commodity market, we expect the prospect of CPO price to be positive and good. Based on the above, we expect the company's performance for the financial year 2018 to be satisfactory," Kim Loong told Bursa Malaysia in its filing.