KUALA LUMPUR (Sept 27): Plantation company Kim Loong Resources Bhd (KL:KMLOONG) reported an 8.9% decline in its second quarter net profit from a year earlier, no thanks to lower earnings contribution by its palm oil milling operations due to lower crude palm oil (CPO) extraction rates.

Net profit for the three months ended July 31, 2024 (2QFY2025) fell to RM39.5 million or 4.05 sen per share, compared to RM43.35 million or 4.48 sen per share in the same quarter last year.

In contrast, revenue rose 5.3% to RM405.94 million from RM385.61 million, the group’s bourse filing showed.

Kim Loong declared an interim single-tier dividend of five sen per share, payable on Nov 13.

Looking ahead, the group aims to increase fresh fruit bunch (FFB) production by 5%, supported by the better age profile of its young palms and its ongoing replanting programme. It plans to replant about 1,000 hectares in FY2025.

As of July 31, 2024, the group's total planted area — excluding land for infrastructure, unplantable land, and areas under development — stood at 15,684 hectares.

For its palm oil milling operations, Kim Loong is targeting a total processing throughput of 1.6 million metric tonnes (MT) of FFB for FY2025. The group expects the average CPO price for the financial year to remain around RM4,000 per MT.

During the quarter under review, Kim Loong's profit from its milling operations was 19% lower as compared to the corresponding period last year. However, year-to-date (YTD) profit was higher by 19% over the same period last year mainly due to better processing margin and higher CPO production achieved.

The group's plantation operation posted higher profit, driven by an 8% increase in FFB prices, despite a slight decline in FFB production. YTD, profit for the segment recorded an 18% growth on higher FFB selling price and production.

For the first half of FY2025 (1HFY2025), Kim Loong reported a net profit of RM89.02 million, up 18.9% from RM74.87 million in 1HFY2024. Revenue for the period increased by 11.5% to RM794.32 million from RM712.29 million.

The improved performance was attributed to a 2% increase in FFB production and a 6% rise in CPO prices. The average selling prices for FFB and CPO YTD were 5% higher than the corresponding period last year.

On Friday, shares in Kim Loong closed one sen or 0.41% lower at RM2.44, giving the company a market value of RM2.38 billion. YTD, its share price has appreciated 22.61%.