KLK’s Q3 net profit slips to RM558.27m

Wednesday, 17 Aug 2022 8:11 PM MYT

KUALA LUMPUR, Aug 17 — Kuala Lumpur Kepong Bhd’s (KLK) net profit slipped to RM558.27 million in the third quarter ended June 30, 2022 (Q3FY2022) from RM783.94 million in the same period a year ago following lower contributions from the manufacturing segment and losses in investment holdings segments.

Revenue, however, rose to RM6.97 billion from RM5.17 billion previously, it said in a filing with Bursa Malaysia.

KLK said manufacturing segment profit fell 11.9 per cent to RM208.9 million in Q3FY2022 from RM237.2 million in Q3FY2021 despite a 33.4 per cent increase in revenue to RM5.864 billion from RM4.4 billion in the corresponding period.

“Investment holding segment’s loss was higher at RM54.4 million in Q3FY2022 from RM24.5 million in Q3FY2021 mainly attributable to higher interest expenses arising from an increase in borrowings,” it said.

Meanwhile, it said the plantation division recorded higher profit which saw a substantial increase in profit to RM594.3 million in Q3FY2022 from RM402.9 million a year ago driven by higher crude palm oil (CPO) and palm kernel (PK) selling prices.

“However, this segment’s profit was partially offset by higher CPO production cost and fair value loss of RM56.4 million on the valuation of unharvested fresh fruit bunches,” it said.

Besides that, it said the property development division’s profit increased to RM17.5 million in Q3FY2022 compared with the preceding year’s quarter of RM15.4 million on the back of higher revenue at RM53.5 million.

KLK said the operating environment for the plantation sector in the next quarter would be challenging with supply chain disruptions and inflationary pressures on fertiliser, agrochemicals and fuel prices.

It said plantation profit is expected to improve in FY2022 driven by higher CPO and PK prices as compared with the previous year.

On the manufacturing segment, KLK said raw material price volatility, high energy costs and persistent logistic issues continue to pose challenges for the remainder of the current financial year.

“Nevertheless, the group expects the segment’s performance to be satisfactory supported by its ability to consistently deliver high-quality and sustainably produced ingredients in a tight supply environment,” it said. — Bernama