KL Kepong expects to replant 3,000ha to 4,000ha in Sabah and plans to plant about 1,000ha to 1,500ha in Liberia.
KUALA LUMPUR: Plantation-property based Kuala Lumpur Kepong (KLK) saw its earnings fall by half in the third quarter ended June 30, 2017 on forex translation losses, weaker oleochemical business and decline in property sales.
It announced on Tuesday that Q3 earnings fell 55.5% to RM112.76mil from RM253.39mil. Pre-tax profit fell 35.9% to RM201.43mil from RM314.34mil.
However its revenue rose 24.2% to RM4.87bil from RM3.92bil. Earnings per share were 10.6 sen compared with 23.8 sen.
On the results, KL Kepong said plantations profit increased 8.3% to RM226.6mil from RM209.3mil.
“Despite accounting for the net unrealised foreign exchange translation loss of RM25.7mil (Q3 FY2016: net gain RM25mil) on loans advanced and bank borrowings to Indonesian companies, plantations profit was supported by higher average selling prices of crude palm oil (CPO) and palm kernel.
KLK said it recorded higher average selling of CPO at RM2,674 per tonne in the just ended quarter, up 7.1% compared with a year ago of RM2,496 while palm kernel was at RM2,211, up 3.5% from a year ago.
Its manufacturing sector recorded a loss of RM21.9mil versus profit of RM103.3mil a year ago. Revenue rose 23.1% at RM2.39bil from RM1.94bil on better selling prices.
“Financial performance of the oleochemical business was significantly impacted by the high volatility of the price of its raw material, crude palm kernel oil (CPKO), during the current quarter which had created mismatch in the selling price of oleo products against its raw materials purchase price,” it said.
KL Kepong said customers were also prudent in their buying strategy due to the market conditions.
“This had resulted in the write-down of RM60.3mil in stocks with most of the oleo products had lower or negative contributions,” it said.
Its oleochemical division suffered a loss of RM26.1mil versus a profit of RM99.5mil a year ago whilst the profit from the other manufacturing units was 8.6% higher at RM4.2mil.
Its properties sector's profit fell 52.0% to RM2.5mil from RM5.1mil a year ago in line with the 42.1% reduction in revenue to RM14mil versus RM24.2mil a year ago from lower sales of its Bandar Seri Coalfields project.
“This quarter's results had provided for the full impairment on a non-core and non-performing investment in China amounting to RM31.9mil,” it said.
For the nine months, its earnings fell 37.3% to RM763mil from RM1.217bil in the previous corresponding period. The preceding year's result had recognised a surplus of RM485.6mill derived from the sale of plantation land to an associate. Its revenue rose 32.4% to RM15.84bil from RM11.96bil.
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