KUALA LUMPUR: Kuala Lumpur Kepong Bhd
(KLK) expects weaker profitability from the plantation segment as the second half of the financial year ending Sept 30 (FY23) is expected to see lower demand compared to the same period last year.
“The group has made concerted efforts to improve estate management, especially in the acquired estates, and clearing of backlog operation works with the return of adequate guest workers in Peninsular Malaysia,” KLK said in the notes accompanying its financial results.
The plantation group said crude palm oil (CPO) prices have hovered between the range of RM3,500 to RM4,400 for the first quarter of the year.
“Producers are remaining cautious as production in Indonesia and Malaysia are not showing signs of a strong recovery that the industry expected at the outset of the year.
“However, global major edible oils supply this year is still forecasted to grow by close to nine million tons, an approximately 4% growth. With demand likely to stay modest going forward due to economic concerns, particularly in key consuming countries, prices are expected to trend lower,” it said.
KLK said the macroeconomic environment for the manufacturing segment, particularly oleochemical sub-segment, remained challenging with weak consumer sentiment, caused by escalated inflation and risk of recession.
“Overall, the group expects its financial performance for the second half of FY23 to be significantly lower,” KLK said.
In the second quarter ended March 31, KLK’s net profit tumbled 65% to RM190.8mil from RM546.6mil in the same quarter last year.
Revenue for the period stood at RM6.05bil versus RM6.4bil a year prior while earnings per share fell to 17.70 sen from 50.70 sen previously.
For the first six months, the group posted a net profit of RM633.8mil on revenue of RM12.7bil.
KLK declared an interim single-tier dividend of 20 sen per share in respect of the financial year ending Sept 30 and will be paid on Aug 1. The entitlement date for the dividend is on July 11.
