KUALA LUMPUR (Feb 16): Boosted by sharply higher palm oil prices, Kuala Lumpur Kepong Bhd's (KLK) net profit jumped 67.69% to RM599.32 million for the first quarter ended Dec 31, 2021 (1QFY22) from RM357.41 million a year earlier.

Earnings per share swelled to 55.6 sen from 33.1 sen, the group’s filing with Bursa Malaysia showed.

Quarterly revenue surged 58.82% to RM6.83 billion from RM4.3 billion in 1QFY21.

On a quarter-on-quarter basis, however, KLK’s net profit was down 4.23% from RM625.8 million in 4QFY21 despite revenue growing 15.07% from RM5.93 billion, mainly due to a lower fair value surplus of RM16.1 million on the valuation of unharvested fresh fruits bunches compared with RM32.8 million in 4QFY21.  

KLK did not declare any dividend for the quarter.

The group said its plantation division's quarterly profit more than doubled to RM607.9 million from RM239 million in 1QFY21, on the back of significantly higher crude palm oil (CPO) and palm kernel (PK) prices as well as recognised profit from newly acquired subsidiaries.

However, the increase in profit was partially offset by higher unrealised loss of RM28.7 million (1QFY21: unrealised loss of RM24.4 million) from fair value changes on outstanding derivative contracts.

The CPO price surged 50.3% year-on-year to RM4,063 per tonne from RM2,703, while the PK price jumped 66.9% to RM2,864 per tonne from RM1,716.

KLK's manufacturing division reported a 74% improvement in profit to RM319.6 million from RM183.7 million a year ago, on the back of a 55.7% increase in revenue to RM5.51 billion and unrealised gain of RM44.9 million from fair value changes on outstanding derivative contracts.

Net profit for the property development fell 14.5% to RM18.8 million from RM22 million a year earlier, despite higher revenue of RM56 million compared with RM53.4 million a year ago. This was attributed to recognition of profit from projects with lower margins.

Over at the investments division, profit improved marginally to RM23.9 million from RM22.2 million a year ago, due to better profit contribution from the farming sector as a result of higher average selling price of all crops.

On prospects, KLK said its plantation profit for FY22 is expected to be better, supported by buoyant CPO and PK prices and profit contribution from newly acquired subsidiaries.

Despite a challenging operating environment posed by volatility of raw material prices and intense competition, the performance of the manufacturing division is projected to be satisfactory for FY22.

Shares in KLK closed up eight sen or 0.31% at RM25.60, bringing the group a market capitalisation of RM27.67 billion.