Friday 29 Mar 2024
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KUALA LUMPUR (Aug 19): Kuala Lumpur Kepong Bhd (KLK) saw its third quarter net profit jump 15.5% to RM246.88 million or 23.2 sen a share, from RM213.66 million or 20.1 sen a share a year ago, on increased revenue and higher dividend income from an overseas investment, Synthomer Plc.

Revenue for the three months ended June 30, 2015 (3QFY15) also grew 21% to RM3.54 billion during 3QFY15, from RM2.92 billion in 3QFY14.

Synthomer, based in Harlow, the UK, manufactures and supplies lattices and specialty emulsion polymers, according to its website. It generated a higher dividend income of RM53.4 million in 3QFY15, compared with RM14.6 million a year ago.

For the nine months period (9MFY15), KLK's net profit fell 16.7% to RM683.62 million, from RM820.95 million a year ago, owing to lower profit from its plantations, manufacturing and oleochemical divisions.

This was despite revenue increasing 16.4% to RM9.72 billion in 9MFY15, from RM8.35 billion in 9MFY14.

For the financial year ending Sept 30, 2015 (FY15), KLK warned that the group’s profit will be lower than that of FY14, on the back of a high inventory level of palm oil, together with ample supply of oilseeds, which have a dampening effect on palm products prices.

“With the prevailing low palm products prices, plantations profit are anticipated to be lower than that of last financial year,” it said.

KLK’s oleochemical division also continues to face stiff competition, low fatty alcohol prices, volatility of palm products prices and the new export levies imposed on palm oil and refined oils in Indonesia.

“In view of the current challenging environment, this division expects profit to be lower than that of the previous financial year,” it said.

KLK's (fundamental: 1.0; valuation: 1.1) share price fell four sen or 0.2% to close at RM20.22 today, giving it a market capitalisation of RM21.58 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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