KUALA LUMPUR (Dec 27): Kim Loong Resources Bhd announced today a 40.5% drop in its latest quarterly net profit, dragged by lower production and depressed palm oil prices.
In an exchange filing today, the group said net profit came in at RM16.83 million for the third quarter ended Oct 31, 2018 (3QFY19), compared with RM28.27 million in the same quarter last year, while revenue fell 21.4% to RM227.64 million from RM289.42 million.
During the quarter under review, Kim Loong said both production and yield of fresh fruit bunches (FFB) fell by 4%, but FFB average selling price saw a 27% decline. Average crude palm oil (CPO) price also fell 21% in the three months.
This resulted in a reduced earnings per share of 1.8 sen, from 3.03 sen in 3QFY18.
For the cumulative three quarters, net profit shrank 37.4% to RM48.98 million from RM78.26 million in the same period last year, while revenue dropped 16.3% to RM674.42 million from RM805.53 million.
It attributed the decline in profitability to lower FFB production at its Sabah estates, and lower FFB and CPO average selling prices, despite higher CPO sales quantity recorded.
Nevertheless, Kim Loong said it expects to perform satisfactorily in the current financial year, with CPO prices stabilising above RM2,000 per tonne in the first half of 2019.
"For the financial year ending Jan 31, 2019, we forecast the FFB production to be in (the) region of 90% of FY18, mainly due to replanting programmes for old palm areas but cushioned by increasing yield from young mature areas.
"For the milling operations, the group has achieved a record high processing quantity of 1.5 million tonnes of FFB in FY18, the management is optimistic that the three mills in the group could continue to maintain high utilisation rate of processing capacity in the next financial year," it added.
Shares in Kim Loong closed two sen or 1.8% higher at RM1.16 today, valuing the group at RM1.09 billion.
The benchmark third-month palm oil futures contract for March delivery was last done RM10 up at RM2,104 a tonne.