KLK reports big jump in quarterly earnings on higher palm oil prices

KUALA LUMPUR: Plantation group Kuala Lumpur Kepong Bhd (KLK) expects profits in fiscal year ending Sept 30 (FY20) to be higher than the previous corresponding period on improved palm oil selling prices.

Net profit in the third quarter ended June 30 jumped to RM368.7mil compared with RM48.6mil a year ago.

Revenue was flat at RM3.7bil, the company said in a filing with Bursa Malaysia today.

"This quarter’s profit had accounted for foreign currency exchange gains totalling RM199.3mil," it said. Excluding the forex gains, the group's pre-tax profit for the current quarter rose 79.3% to RM287.8mil.

The group's plantation segment recorded a substantially higher profit of RM229.4mil.

This was on the back of higher crude palm oil (CPO) and palm kernel prices, as well as increased output from its estates.

"CPO prices have improved, underpinned by declining palm oil inventories and recovery in demand with the re-opening of global economies," KLK said.

"In the light of improvement in CPO prices together with the results achieved to-date, plantation profit is anticipated to be higher for the current financial year 2020," it added.

Meanwhile, the group's oleochemical division continued to benefit and focus on the recovery of major markets.

KLK expects the division to post "satisfactory" profit for FY20.