Kuala Lumpur Kepong’s 3Q earnings up 2.6%

KUALA LUMPUR (Aug 18): Kuala Lumpur Kepong Bhd’s (KLK) net profit rose 2.6% to RM253.39 million or 23.8 sen a share for the third financial quarter ended June 30, 2016 (3QFY16) from RM246.88 million or 23.2 sen a share a year ago, on increased contributions from its plantations, manufacturing and oleochemical divisions.

The rise in net profit was offset by a 33.9% decline in the property sector’s profit to RM5.1 million from RM7.8 million in 3QFY15, which was affected by the slowdown in the property market, KLK said in a filing with Bursa Malaysia.

The group’s revenue also grew 10.9% to RM3.92 billion in 3QFY16 from RM3.54 billion in 3QFY15.

For the cumulative nine months ended June 30, 2016 (9MFY16), its net profit increased 78% to RM1.22 billion or 114.3 sen a share from RM683.62 million or 64.2 sen a share in 9MFY15, while revenue grew 23.1% to RM11.96 billion from RM9.72 billion a year ago.

On prospects for FY16, KLK said the current palm oil prices remain resilient on account of low stock levels due to the drought-hit production.

“With the anticipated recovery of fresh fruit bunch crop production in the coming months, production cost may decline. Taking these factors into consideration, the plantations division’s profit is expected to be satisfactory for the current financial year,” it said, adding that the group expects a satisfactory profit for FY16.

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This article first appeared in The Edge Financial Daily, on Aug 18, 2016. Subscribe to The Edge Financial Daily here.