KUALA LUMPUR (Sept 28): Higher oil palm output and prices helped Kim Loong Resources Bhd record a 61.6% jump in net profit to RM27.54 million for its second quarter ended July 31, 2017 (2QFY18), from RM17.04 million a year earlier.
 
The group said fruit bunches (FFB) production grew 23% to 82,494 tonnes, from 67,217 tonnes in 2QFY17, while crude palm oil (CPO) output rose 24% to 78,568 tonnes, from 63,449 tonnes.
 
The average CPO price during the quarter was RM2,706 per tonne, compared with RM2,494 in 2QFY17, Kim Loong said in its filing with Bursa Malaysia.
 
Quarterly revenue came in at RM260.46 million, up 23.6% compared with RM210.8 million in 2QFY17.
 
Cumulative net profit for the first half of FY18 (1HFY18) rose 76% to RM51.85 million, from RM29.45 million for the same period last year, while revenue improved 32.8% to RM516.11 million, from RM388.5 million in 1HFY17.
 
For its plantation operations, Kim Loong said the higher quarterly and first half revenue and profit was mainly contributed by higher FFB production and price.
 
“The higher FFB production for the current quarter and the year-to-date, as compared to the corresponding periods last year, was substantially contributed by the estates in Keningau region, which had shown a significant increase over production last year. Last year, the low production was likely caused by the El Nino phenomenon,” the group said.
 
As for its palm oil milling operations, Kim Loong said improved performance was mainly due to higher palm oil price and processing quantity. In terms of profit, the growth was mainly attributed to better processing margin achieved, due to easing competition for crops from surrounding mills.
 
“The market condition and demand for the group’s milling products has been good and steady for the current quarter and year-to-date,” the group said.
 
Kim Loong declared an interim single-tier dividend of nine sen, which will be paid on Nov 21.
 
On outlook, Kim Loong said it expects FFB production for FY18 to be 20% higher in the current financial year, than what was achieved in FY17, as it has seen an increase in FFB production from young mature areas and strong FFB yield recovery in Keningau, where about 50% of the group’s planted mature area is located.
 
“Subject to the fluctuation in the ringgit and volatility of the commodity market, we expect the prospect of CPO price to be positive and good,” Kim Loong added.
 
Kim Loong’s share price closed six sen or 1.5% higher at RM3.96 today, valuing the group at RM1.23 billion.