KUALA LUMPUR (Dec 29): Kim Loong Resources Bhd’s net profit for the third  quarter ended Oct 31, 2016 (3QFY17) rose 3.3% to RM25.11 million, from RM24.29 million a year earlier, helped by lower operating expenses and higher profit from its plantation operations.
 
Revenue rose 18.6% to RM248.1 million, from RM209.12 million, driven by higher revenue from both the plantation and palm oil milling operations.
 
In its filing to Bursa Malaysia, the group said net profit for the first nine months of FY17 dropped 11.2% to RM54.56 million, from RM61.42 million in 9MFY16. Revenue rose 8.8% to RM636.6 million, from RM585.36 million.
 
Kim Loong has declared a special single-tier 5% dividend for FY17, which will be paid on Feb 15.
 
Moving forward, the group foresees an increase in fresh fruit bunches (FFB) production from young mature area in FY17. 
 
However, in view of the potential effects caused by the El Nino phenomenon in the first quarter and lower-than-expected FFB yield recovery in the Keningau region, where about 50% of the group’s planted mature area is located, it also expects FFB production to potentially be about 15% lower, compared with the quantity achieved in FY16.
 
The FFB production for 3QFY17 was 67,900 tonnes, up marginally by 1% compared with 67,200 tonnes in the preceding quarter. The group’s FFB production trend has been flat since May.
 
“In terms of crude palm oil (CPO) production, we expect it could be up to 20% lower, compared with the quantity achieved in FY16, mainly due to lower FFB intake in the Keningau region, caused by low FFB production and stiff competition for crop,” the group said.
 
“Subject to the fluctuation in the ringgit currency and commodity market, we expect prospects of CPO price to be good, with strong support at current level in the remaining period of the current financial year,” it added.
 
Despite a drop in production, the group’s performance in FY17 is expected to be satisfactory, on the account of higher palm oil prices.
 
The CPO price in 3QFY17 averaged at about RM2,690 per tonne, which is 8% higher than RM2,490 per tonne in the preceding quarter.
 
Kim Loong’s shares were untraded today. They last closed unchanged at RM3.35, giving the firm a market capitalisation of RM1.04 billion.