KUALA LUMPUR (Aug 19): Batu Kawan Bhd’s net profit for the third quarter ended June 30, 2020, surged 318.4% to RM212.65 million from RM50.83 million in the previous year’s corresponding quarter, mainly due to unrealised foreign currency exchange (forex) translation gains.

Revenue for the quarter was flat at RM3.82 billion. Earnings per share jumped to 53.74 sen from 12.79 sen a year ago.

The increase in profit was due to RM223 million in unrealised foreign currency exchange (forex) translation gains on bank and inter-company loans, following the significant appreciation of the Indonesian rupiah against the US dollar and the ringgit.
It also said that the previous year’s profit for the same quarter was affected by a RM145.32 million provision for impairment of an estate in Liberia.

“Excluding the above forex impact and provision for impairment of an estate, the group’s profit for the current quarter increased by 52.5% to RM297.36 million,” said Batu Kawan in an exchange filing.

The group said its plantation segment posted a 469.7% spike in profit to RM230.34 million, amid higher crude palm oil (CPO) and palm kernel (PK) prices coupled with lower CPO production cost from a 5.6% increase in fresh fruit bunch (FFB) production, as well as higher contributions from its processing and trading operations.

The manufacturing segment saw a 5.9% fall in profit, mainly due to lower profit from its industrial chemical division due to lower selling prices and sales volume.

The property development segment saw profit declining 30.7% to RM7.63 million.

For the nine months to June 30, net profit jumped 24.5% to RM332.11 million from RM266.8 million in the previous year’s preceding period, while revenue fell 1.3% to RM11.96 billion from RM12.12 billion.

Looking ahead, the group said its plantation segment is expected to see better profit for FY20, given the improved CPO prices while the profits of the oleochemical and industrial chemical divisions are expected to remain satisfactory amid a recovery in demand.

“Overall, the group expects profit to improve for FY20 in spite of uncertainties of the COVID-19 pandemic,” said Batu Kawan.

Batu Kawan shares closed unchanged at RM14.78, giving it a market capitalisation of RM5.91 billion.