KLK 2Q net profit climbs 35% on lower taxes

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KUALA LUMPUR (May 15): For its second quarter ended March 31, 2019 (2QFY19), Kuala Lumpur Kepong Bhd (KLK) reported a 34.7% jump in net profit to RM142.96 million versus RM106.15 million a year ago, on the back of lower taxes.

This was despite a decline in quarterly revenue to RM3.94 billion down 15.9% from RM4.69 billion a year ago, according to the group’s stock exchange filing today. Taxation for the quarter fell to RM42.6 million from RM87.76 million previously.

Among the group’s sectors which recorded lower revenue were manufacturing, which witnessed lower selling prices, and property development. While its manufacturing segment recorded an 18.5% year-on-year fall in profit to RM93.3 million from RM114.5 million, its property development saw a slightly higher profit of RM7.1 million versus RM6.6 million previously.

Notably, KLK’s plantation segment recorded substantially lower profit, down 55.8% year-on-year to RM100.9 million from RM228.4 million, due to weaker selling prices of crude palm oil (CPO) and palm kernel (PK) in 2QFY19.

KLK declared a single tier interim dividend of 15 sen in respect of FY19, comparable to the year-ago quarter.

For the six-month period ended March 31, 2019 (1HFY19), the group posted a 15.33% increase in net profit to RM393.87 million while revenue declined 18.6% to RM8.03 billion.

KLK expects its operational profits to be lower in its 2019 financial year, citing lower CPO and PK prices currently, which would drag profits in its plantations segment.

“For the oleochemical business, the profits for the first half were lower compared with the same period last year,” it added.

Shares in KLK closed up 2 sen at RM24.40, giving the group a market value of RM26.05 billion.