KLK’s Q3 profit slides 65% on CPO price drops

PETALING JAYA: Bhd (KLK) posted a 65.2% decline in net profit to RM48.62 million for the third quarter ended June 30, 2019 against RM139.87 million in the previous corresponding period, due to decline in its plantation and corporate segment.

Its revenue also saw a drop of 14.5% to RM3.7 billion from RM4.33 billion.

According to KLK’s filing with the stock exchange, its plantation profit for the quarter slumped 67.9% to RM39.8 million from RM124 million in the same quarter of the previous year, due to the decline in crude palm oil (CPO) price and palm kernel (PK) price despite improvements in production, processing and trading operations.

For the quarter, average CPO price contracted 14.3% to RM1,973 per metric tonne (mt), while average PK price stood at RM1,085/mt with a 36% decline.

On the other hand, its corporate loss widened to RM123.1 million from RM20 million, arising from a RM145.3 million impairment for an estate in Liberia.

Conversely, KLK’s manufacturing segment profit improved 16.2% to RM99 million during the quarter, attributed to better margins and sales volume in the oleochemical division.

In addition, the group’s property segment reported a 33.4% jump in profit to RM11 million.

KLK’s nine-month net profit went down 8.1% to RM442.49 million from RM481.38 million in the same period a year ago, while revenue slipped 17.3% to RM11.73 billion from RM14.19 billion.

Moving forward, the group estimates the profit from its plantation segment to be lower due to the lower prevailing CPO and PK prices compared to the previous year.

“However, oleochemical division’s profit for this is expected to be satisfactory due to better margins from lower raw material prices,” it said.

Overall, it anticipates a reduced profit for the financial year 2019.

Source: The Sun Daily

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