Keck Seng 3Q profit up on better palm oil refining margins, improved hotel occupancy

TheEdge Mon, Nov 22, 2021 11:03pm - 2 years View Original


KUALA LUMPUR (Nov 22): Palm oil producer Keck Seng (Malaysia) Bhd's net profit rose 327% to RM17.56 million for the third quarter ended Sept 30, 2021 (3QFY21), compared with RM3.84 million in the immediate preceding quarter, on better refining margins.

The group also attributed the higher earnings to lower losses in its hotel division from improved occupancy rates.

Revenue rose 5.35% to RM329.25 million, from RM312.52 million in 2QFY21, on higher volume and selling price of refined oil, coupled with the improved hotel segment contribution.

However, its property development division underperformed on lower number of units sold as well as absence of one-off gain from sale of industrial land.

On a year-on-year basis, Keck Seng returned to the black from a net loss of RM11.45 million in 3QFY20, on the back of better performance from the manufacturing and hotel division, while its share investment division also booked a lower fair value loss.

Quarterly earnings per share came in at 4.89 sen, from 3.19 sen loss per share in 3QFY20.

Revenue rose 54.35% to RM329.25 million, from RM213.31 million a year ago, mainly due to higher selling price of refined oil.

For the nine-month period ended Sept 30, 2021, Keck Seng booked a net profit of RM32.23 million or 8.97 sen per share, against a net loss of RM21 million or 5.84 sen per share in the same period last year.

Nine-month revenue rose 45.27% to RM893.77 million from RM615.25 million.

This was mainly thanks to improvements in the manufacturing and plantation divisions, hotels, as well as share investments, while the property segment contribution came in weaker.

On prospects, Keck Seng foresees flat performance from the plantation segment in FY21 on higher prices, offset by lower production volume, the latter of which will affect its manufacturing segment in 4QFY21.

In the property segment, it sees weaker occupancy rates, while it will also continue to market its ongoing property projects in Johor.

On the hotel division, Keck Seng cited the uncertainties surrounding the pandemic.

"It is expected that the recovery for our hotels will be slow and gradual, with most of the hotels projecting normalisation only in two to three years' time," it said.

Shares of Keck Seng traded two sen or 0.58% lower at RM3.43, giving the company a market capitalisation of RM1.24 billion.

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