KUALA LUMPUR (Aug 17): Kuala Lumpur Kepong Bhd's (KLK) net profit for the third quarter ended June 30, 2022 (3QFY22) slipped 28.78% to RM558.27 million, from RM783.94 million a year earlier, due to the absence of a disposal gain from an associate in the year before.

In a Bursa Malaysia filing on Wednesday (Aug 17), KLK said the group's 3QFY22 pre-tax profit would be 20.4% higher at RM753.7 million against last year's RM626.1 million, if the fair value surplus of RM324.3 million on the disposal of Aura Muhibah Sdn Bhd was excluded from 3QFY21.

Quarterly revenue rose 34.58% to RM6.96 billion from RM5.17 billion as its plantation segment reported a substantial increase in profit, driven by higher crude palm oil (CPO) selling prices, which rose 41%, as well as a 41% increase in palm kernel selling prices.

KLK added that there was a higher unrealised gain of RM86.7 million in 3QFY22 (against an unrealised gain of RM18.7 million in 3QFY21) from fair value changes on outstanding derivative contracts in the plantation segment.

Earnings per share fell to 51.8 sen from 72.7 sen a year ago. The group did not declare any dividend for 3QFY22.

For the cumulative nine months ended June 30, 2022, net profit rose 4.44% to RM1.7 billion from RM1.63 billion in the previous corresponding period, while revenue climbed 44.28% to RM20.17 billion from RM13.98 billion.

In terms of prospects, KLK said although CPO prices have recently fallen from historical highs, the supply of vegetable oils globally is still tight and prices are expected to be supported at current levels.

"Apart from the softening commodity prices, the operating environment for the plantation sector in the next quarter will be challenging with supply chain disruptions and inflationary pressures on fertiliser, agrochemicals and fuel prices.

"The group has taken steps to mitigate these risks by continuing its efforts to aggressively boost productivity and enhance its mechanisation programmes," the group said, adding that it expects plantation profit to improve in the financial year ending Sept 30, 2022 (FY22) compared with FY21.

It also highlighted that its manufacturing segment continues to face raw material price volatility, high energy costs and persistent logistical issues.

"Nevertheless, the group expects the [manufacturing] segment's performance to be satisfactory, supported by its ability to consistently deliver high-quality and sustainably produced ingredients in a tight supply environment.

"Overall, the group expects to deliver a favourable set of results for FY22," KLK said.

On Wednesday, KLK's share price closed 54 sen or 2.4% higher at RM23, valuing the group at RM24.86 billion.