Kim Loong net profit slumps on lower palm oil prices

TheEdge Wed, Mar 27, 2019 10:29am - 5 years View Original


KUALA LUMPUR: Kim Loong Resources Bhd’s net profit fell 83% to RM3.15 million or 0.34 sen per share in the fourth quarter ended Jan 31, 2019 (4QFY19), from RM18.28 million or 1.96 sen per share a year ago, no thanks to lower average crude palm oil (CPO) prices.

In a filing with Bursa Malaysia, the group said average palm oil prices fell 34% compared with the corresponding quarter the year before, despite a marginal increase in fresh fruit bunch (FFB) production.

The substantial drop in CPO selling prices also affected its palm oil milling operations during the quarter, despite a higher sales quantity recorded. Further, the competition for crops in the Sandakan region also resulted in a squeeze in processing margin during the quarter.

The group’s quarterly revenue came in 26% lower at RM198.52 million, versus RM269.81 million a year ago. Kim Loong proposed a final dividend of three sen per share, payable on Aug 29. For FY19,

Kim Loong’s net profit was down 46% to RM52.12 million or 5.58 sen per share, from RM96.55 million or 10.34 sen per share in FY18. Revenue fell 19% to RM872.94 million from RM1.08 billion, due to significantly lower average CPO prices and FFB production.

“The lower FFB production for the current year, compared with that last year, was mainly attributable to the estates in Sabah showing a lower production over last year’s relatively high production. A strong FFB production recovery was recorded last year.

“Nevertheless, the group’s estates in Sabah have performed well in achieving the set FFB production target,” Kim Loong said.

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