KUALA LUMPUR: Plantation company Kuala Lumpur Kepong Bhd (KLK) expects its operational profits in 2019 to be lower than the previous year on weak crude palm oil (CPO) prices.
Net profit for the second quarter ended March 31 stood at RM142.96mil on revenue of RM3.94bil. The company has declared an interim dividend of 15 sen a share.
The company, in a filing with Bursa Malaysia today, said profit from its plantation business was more than halved in second quarter to RM100.9mil compared with RM228.4mil recorded in the same corresponding period a year ago.
The company said whilst fresh fruit bunches (FFB) production had improved 3.1% to 987,904 tonnes, the profit for the quarter under review was affected by the weaker selling prices of CPO and palm kernel.
"Current CPO and palm kernel prices are lower than the preceding year due to the prevailing high stocks level. Thus, plantation profits for this financial year will be lower.," it said.
For the oleochemical business, the profits for the first half was lower as compared to the same period last year.
"Going forward, margins are volatile but reasonable profit is expected in view of capacity utilisation," it said.