KLK’s 1Q net more than double, plantation to anchor FY21

by SHAHEERA AZNAM SHAH / pic by BLOOMBERG

KUALA Lumpur Kepong Bhd (KLK) is expecting its financial year 2021 (FY21) to be heavily supported by its plantation segment which is set to gain from the current strong crude palm oil (CPO) and palm kernel (PK) prices.

“The plantation profit will improve in FY21 given the current buoyancy in CPO and PK prices. The performance of the oleochemical division has so far been satisfactory, but is expected to be challenging.

“Overall, the group’s profit for FY21 will be higher,” the plantation group noted in its exchange filing yesterday.

For its first quarter of 2021 (1Q21) ended Dec 31, 2020, KLK’s net profit more than doubled to RM357.41 million from RM167.2 million in a similar quarter a year ago, on the back of the higher contribution from all its business segments.

Revenue for the quarter improved by 5.45% to RM4.3 billion from RM4.08 billion, with an earnings per share of 33.10 sen compared to 15.70 sen a year ago.

During the quarter, KLK’s operating profit from its plantation segment surged 83.3% to RM288.9 million from RM157.7 million on the back of higher CPO and PK selling prices and better contributions from its processing and trading operations.

KLK’s manufacturing profit surged by 67.2% to RM133.7 million from RM80 million, underpinned by a 21.5% increase in revenue.

It said the improvement in the operating profit was largely contributed by its operations in China and Europe, coupled with the unrealised gain from fair value changes on outstanding derivative contracts of RM14.5 million.

The contribution from the property segment jumped 62.2% to RM22 million against RM13.6 million a year ago, while its revenue rose to RM53.4 million compared to RM52.2 million in 1Q20.

KLK attributed the higher performance in its property segment to the recognition of profit from projects with better margins.

Its investment segment recorded a profit of RM22.2 million compared to a loss of RM4.6 million in the similar quarter a year ago, achieved through the farming sector which posted a substantial rise in profit, underpinned by improved yields and higher cropped area.