KLK posts quarterly net profit of Rm28mil
PETALING JAYA: Kuala Lumpur Kepong Bhd’s (KLK) net profit suffered a sharp plunge in the second quarter of financial year 2020 (2Q20) due to unrealised foreign currency exchange losses of Rm178.1mil and lower contribution from its property development business.
The plantation giant said in a filing with Bursa Malaysia yesterday that its net profit in the January-march 2020 period fell by 80.5% year-on-year (y-o-y) to Rm27.89mil as compared to Rm142.96mil a year earlier.
This was despite stronger profits from KLK’S core plantation segment as well as manufacturing business.
According to the group, the plantation segment’s profit surged 44.4% due to favourable crude palm oil (CPO) and palm kernel selling prices as well as a Rm11.2mil unrealised gain arising from changes in fair value on outstanding derivative contracts.
Meanwhile, the manufacturing segment’s profit was 4.4% higher, thanks to improved margins of its Malaysia and China operations.
KLK’S revenue in the second quarter also declined by 3.5% y-o-y to Rm3.8bil.
As a result of the sharp fall in profitability, KLK’S earnings per share in 2Q20 were 2.6 sen as compared to 13.4 sen a year earlier.
The group proposed a 15 sen dividend for the second quarter.
Cumulatively, in the second half of financial year 2020 (2H20), KLK’S net profit halved to Rm195.09mil. Meanwhile, its revenue dropped by 1.8% y-o-y to Rm7.88bil.
KLK expects its profits for the current financial year to be satisfactory, subject to uncertainties arising from the Covid-19 pandemic.
“CPO prices are anticipated to remain under pressure in 2H20 due to economic uncertainties resulting from the Covid-19 pandemic.
“Nevertheless, plantation profit is expected to be satisfactory for the year in view of this segment’s results and CPO prices achieved to date.
“Amidst concerns on global economic uncertainties, oleochemical division will focus on the recovery of major markets and expects a challenging operating environment for financial year 2020,” it said.