Kim Loong Resources Bhd’s net profit for the second quarter ended July 31, 2018, (2Q18) fell 54.27% year-on-year (YoY) to RM12.01 million due to lower profit contribution from the plantation and milling operations.
In an exchange filing yesterday, the oil palm grower noted profit contribution from the plantation business dropped by 67% YoY to RM5.97 million due to lower production and prices while profit for the milling operations dropped from RM12.63 million to RM8.17 million due to drop in processing margin. Revenue for the three-month period decreased by 19.26% YoY to RM210.29 million.
For the financial year ending Jan 31, 2019 (FY19), Kim Loong forecast fresh fruit bunches (FFB) production to be in region of 85% of FY18 mainly due to upcoming replanting programs for old palm areas but increasing yield from young mature areas will cushion the impact.
As for the milling operations, the group has achieved a record high processing quantity of 1.5 million MT of FFB in FY18, and management is optimistic the three mills in the group could continue to maintain high utilisation rate of processing capacity in the next financial year.