KUALA LUMPUR (June 29): Plantation firm Kim Loong Resources Bhd's net profit rose 57.9% to RM22.9 million for the first financial quarter ended April 30, 2020 (1QFY21), from RM14.51 million a year earlier, on higher fresh fruit bunch (FFB) and crude palm oil (CPO) prices by 26% and 25% respectively.

This resulted in higher earnings per share of 2.45 sen from 1.55 sen for 1QFY20.

Quarterly revenue climbed to RM201.36 million from RM168.97 million previously.

In a filing with Bursa Malaysia today, Kim Loong said while it recorded a drop in FFB production during the quarter, this was offset by a higher average FFB selling price, up by 26%. Its plantation operations did not face problems in selling its FFB production as most of the produce was supplied to mills within the group.

On its milling operations, the group said the average CPO selling price, which grew 25% year-on-year, and better processing margin contributed to the segment’s better performance.

“In addition, a revenue of RM1.46 million has been generated from supplying power to Tenaga Nasional Bhd's (TNB) grid for the current year to date. The market condition and demand for the group’s milling products have been good and steady for the current quarter and year to date,” it added.

Kim Loong is in the process of acquiring oil palm estates in Sabah totalling gross land area of 2,862 acres (1,158ha) for RM92.54 million. Barring any unforeseen circumstances, the group expects to conclude the acquisitions by the third quarter of this year.

In light of this, it said management forecasts FFB production in FY21 to be about 10% higher than the quantity achieved in FY20.

“On its milling operations, the group sees a similar processing quantity as recorded in FY20. The performance of the milling operations will also be supplemented by a revenue of about RM6 million from supplying power to the grid.

“With the recent volatile movements in CPO commodity prices and recovery from the level near RM2,000 per tonne, management is of the view that the CPO price could hold above RM2,400 per tonne in the near term. However, the CPO price is generally susceptible to fluctuations in the currency exchange rate, demand and supply of the commodity and import policies of major importing countries,” it added.

Kim Loong shares closed one sen or 0.88% lower at RM1.12 today, with only 3,000 shares done, valuing the group at RM1.05 billion.