KLK’s Q2 earnings rise despite sharp fall in plantation profit

KUALA LUMPUR, Kuala Lumpur Kepong Bhd (KLK) managed to record a 34.7 per cent growth in second-quarter earnings due to lower taxation and a significant improvement in corporate income, which offset the sharp fall in plantation profit.

In a filing with Bursa Malaysia today, KLK said it posted a net profit of RM142.96 million for the quarter ended March 31, 2019, up from RM106.15 million in the previous year’s corresponding period.

However, revenue slid 15.9 per cent to RM3.94 billion from RM4.69 billion a year ago.

The company said the plantation segment’s profit slumped by 55.8 per cent to RM196.1 million during the quarter under review due to the weaker selling prices of crude palm oil (CPO) and palm kernel (PK).

Its manufacturing business also chalked up a lower profit of RM93.3 million compared with RM114.5 million a year earlier, owing to lower selling prices.

Its property segment did little to offset the contraction in the other segments, increasing its profit by only RM513,000 year-on-year to RM7.11 million.

However, aside from the segmental results, KLK recorded a corporate income of RM11.27 million during the quarter under review, reversing a corporate loss of RM122.53 million incurred a year earlier, as the group slashed its foreign exchange loss to RM3 million from RM120.4 million previously and achieved a higher surplus of RM25.6 million versus RM10.4 million, arising from the government’s acquisition of its plantation land.

On prospects for this financial year, KLK said the group’s operational profits were expected to be lower overall.

It forecast a weaker plantation profit due to the current CPO and PK prices being lower than in the preceding year due to the prevailing high stocks level.

On the oleochemical business, KLK said the segment’s profit for the first half had been lower compared to the same period last year and the margins were volatile. However, a reasonable profit is expected in view of capacity utilisation.

Source: BERNAMA (News Agency)