PETALING JAYA: Kim Loong Resources Bhd saw its net profit increase 42.5% to RM41.09mil for the third quarter of its financial year ending Jan 31, 2022 (Q3’FY22) from RM28.84mil in Q3’FY21 on higher crude palm oil (CPO) and fresh fruit bunch (FFP) prices.

       During the quarter in review, the plantation group’s revenue rose 76.9% to RM492.8mil from RM278.6mil in Q3’FY21.

       Kim Loong declared a special single-tier dividend of four sen per share.

       For the nine months to October 2021, the group’s net profit grew 24.4% to RM105.62mil from RM84.9mil in the previous corresponding period, while revenue rose 68% to RM1.21bil from RM717.94mil.

       “The remarkable performance for the current financial year-to-date was mainly due to higher average selling prices of FFB and CPO by 70% and 66% respectively.

       “On the other hand, FFB production was lower by 10% while the CPO production had increased by 4%,” Kim Loong said in its filings with Bursa Malaysia.

       It noted that based on recent observation of production output, the management forecast that the FFB production for FY22 could be about 95% of the quantity achieved in FY21.

       This was after taking into consideration the impact of ongoing replanting programme, labour shortage and seasonal factor on cropping trend.

       As for palm oil milling operations, Kim Loong said the management expects a total processing quantity of about 1.45 million tonnes of FFB, which is close to 10% higher than FY21.

       “The performance of the milling operations will also be supplemented by revenue of about RM5mil from supplying power to the grid,” it said.

       During the current year-to-date, the group took physical possession of about 1,100ha estate land of which about 1,040ha are planted with mature oil palms in February 2021. The group has also carried out replanting of about 360ha.

       It said its plantation operations saw higher revenue and profit for the current quarter and the year-to-date as compared with the corresponding periods last year due mainly to higher average FFB selling price by 49% and 70% respectively.

       Despite a higher FFB selling price, the profit for the current quarter was only RM21.23mil due to a fair value loss of RM14.07mil arising from fair value changes in commodity derivatives recognised as other expenses for hedging against price declines.

       Out of the estates within the group, the estates in Keningau, Sabah have suffered a significant drop of 35,000 tonnes in FFB production, representing a 31% drop in production yield per ha as compared with the preceding year corresponding period for nine months mainly due to seasonal factor and a relatively higher-than-expected yield achieved in the preceding year corresponding period. “Replanting activity and newly mature area are also contributing factors towards a lower production volume and yield.

       “On a positive note, the estate which the group took over physical possession in February 2021 has contributed about 18,300 tonnes in FFB production,” it added.

       The plantation operations did not face problem in selling its FFB production as most of the produce was supplied to mills within the group.

       As for its palm oil milling operations, Kim Loong said the higher revenue for the current quarter and the year-to-date compared with the corresponding periods last year was mainly contributed by higher average CPO selling price.

       The market condition and demand for the group’s milling products has been good and steady for the current quarter and year-to-date, it said.

       The profit achieved for the current quarter was RM38.80mil, representing a 59% jump compared with RM24.39mil for the previous year corresponding quarter.

       “Increase in profit was mainly due to better processing margin and uptrend of CPO price,” the company said.