- Kuala Lumpur Kepong’s (KLK) 1Q17 net profit slid 54.6 percent to RM360.7 million in the absence of land disposal gain.
- Revenue however, jumped 26.7 percent to RM5.5 billion mainly due to a 53.6 percent increase in plantation profit attributable to improved selling prices of crude palm oil (CPO) and palm kernel.
- Average selling prices for CPO and palm kernel rose 37.9 percent and 84.3 percent respectively compared to the same quarter year-on-year, underpinned by low inventory and weakening Malaysian ringgit.
- The group’s manufacturing sector profit dropped 80.3 percent to RM24.7 million, while its property sector and farming sector registered profits of RM15.9 million and RM36.9 million respectively.
Significance: KLK expressed concerns that CPO prices may ease off going forward on the back of an expected recovery in fresh fruit bunches production. Nevertheless, the group foresees a satisfactory profit for FY17 with forward sales already committed into the second quarter.