KUALA LUMPUR (May 25): Kulim (Malaysia) Bhd's net profit for the first quarter ended March 31, 2015 (1QFY15) surged 3,467.5% to RM1.36 billion or 102.51 sen a share from RM38.14 million or 2.98 sen a share a year ago, due to a gain of RM1.34 billion arising from the disposal of New Britain Palm Oil Ltd (NBPOL).

Kulim had on Feb 26 this year completed the disposal of its entire equity interest in NBPOL to Sime Darby Bhd for £7.15 per share or £525.4 million (RM2.75 billion).

Stripping out the disposal gain, Kulim’s profit from continuing operations would have been 11.6% lower to RM15.03 million in 1QFY15 from RM17 million a year ago.

Revenue for 1QFY15, meanwhile, declined 2.9% to RM268.17 million from RM276.2 million in 1QFY14, dragged by poor performance of its plantation division, which registered a 30.5% and an 81% slump in revenue and pre-tax profit respectively.

Kulim did not declare any dividend in 1QFY15.

Kulim’s fresh fruit bunch production in 1QFY15 decreased 5.41% to 167,793 tonnes from 177,398 tonnes a year ago, while its crude palm oil (CPO) production decreased 12.57% to 52,425 tonnes from 59,960 tonnes.

“The oil palm sector recorded lower profits for the first quarter 2015 mainly due to lower average price of CPO from the Malaysia plantation segment compared with the corresponding quarter last year,” Kulim said in a filing with Bursa Malaysia this evening.

The weak performance from its plantation division was mitigated by the improvement in Kulim’s oil and gas division, which saw revenue doubled to RM78.82 million in 1QFY15 from RM37.53 million in 1QFY14, while segment profit increased 23% to RM8.38 million from RM6.81 million.

On outlook, Kulim expects the oil palm prices to be "still stable albeit at lower level".

“However, with improved productivity and greater cost efficiency, notwithstanding the challenges in the financial year 2015, we still expect respectable results from the plantations,” it said.

Kulim (fundamental: 0.85; valuation: 2) shares have fallen 30.2% from RM3.32 on March 2 to close at RM2.55 today, giving it a market capitalisation of RM3.35 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)