KUALA LUMPUR (June 22): Johor Corp (JCorp)’s plantation unit Kulim (M) Bhd (Kulim) plans to raise approximately RM1 billion in an initial public offering (IPO) on the local bourse as early as next year, according to a report by Bloomberg.

The Edge Weekly (May 16-22, 2022 edition) reported that JCorp is mulling the IPO to ride on strong crude palm oil (CPO) prices, with RHB Investment Bank Bhd roped in for the listing, quoting sources.

Bloomberg reported that Johor Corp, the investment arm of the Johor State government, is asking bankers for pitches for the potential listing of Kulim, and is targeting a valuation of around US$1 billion (approximately RM4.41 billion) for the plantation unit.

The newswire also mentioned that the IPO could take place as early as next year. Deliberations are ongoing and details of the IPO such as size and timing could change, its sources said.

According to its website, Kulim’s plantation assets are small compared with some of the behemoths on Bursa. It has 63,158ha of plantation land, of which 88% (55,796ha) is located in Malaysia and 12% (7,362ha) in South Sumatra, Indonesia.

Apart from palm oil, Kulim has smaller pineapple, cucumber, coconut and durian farms, among others, but these measure only about 365ha in total. The company also has 7,500 heads of cattle and 220 heads of sheep, but the livestock farming business is still in its infancy and not generating much profit yet.

Based on a check from CTOS’ website, Kulim suffered an after tax loss of RM461.31 million on the back of RM1.41 billion in revenue for the financial year ended December 2020 (FY20).

In FY19, it suffered an after tax loss of RM98.2 million, from RM1.21 billion in revenue.

The company was last profitable in FY18, when it reported an after tax profit of RM32.87 million on the back of RM1.39 billion in sales.

Kulim was previously listed on the Kuala Lumpur stock exchange in 1975 and Johor Corp became a major shareholder of Kulim a year later. The state-owned firm took Kulim private in 2016.