KUALA LUMPUR (Feb 18): Batu Kawan Bhd’s first quarter net profit rose 9.61% to RM136.67 million or 34.19 sen per share, from RM124.69 million or 30.98 sen per share a year ago, mainly attributable to its profitable investment holdings segment.

Revenue for the first quarter ended Dec 31, 2018 (1QFY19) however fell 20.77% to RM4.22 billion, from RM5.32 billion.

In a filing with Bursa Malaysia, Batu Kawan explained that its investment holdings segment recorded a substantial increase in net profit of RM98.12 million, versus a loss of RM100.54 million previously.

This was mainly attributed to a foreign exchange currency gain on translation of inter-company loans denominated in foreign currencies, the farming sector's higher profit and a surplus from the government acquisition of plantation land.

Higher earnings were also due to increase in earnings from the group’s property development.

The property development segment achieved a profit of RM11.13 million, versus RM1.73 million previously, as revenue rose to RM39.81 million from RM17.88 million.

Noting that crude palm oil (CPO) prices have recovered from the preceeding quarter's low levels, the group said its plantation sector should achieve satisfactory results if recovery is sustained.

Batu Kawan added that its oleochemical business is anticipated to sustain its performance, with higher capacity utilisation and improvement in margins.

“Despite higher energy and raw material costs having impacted the industrial chemical division's profit, [it] is however projected to be satisfactory,” the group said.

Overall, Batu Kawan said the group is anticipating a “reasonably satisfactory profit” for FY19.

Shares of Batu Kawan closed eight sen or 0.46% lower at RM17.22 today, valuing the group at RM6.83 billion.