KUALA LUMPUR (Dec 19): United Malacca Bhd's (KL:UMCCA) net profit more than doubled for its second quarter of August-October, driven by higher average crude palm oil (CPO) and palm kernel (PK) prices.

The group, which has operations in both Malaysia and Indonesia, recorded a net profit of RM30.92 million for the quarter ended Oct 31, 2024 (2QFY2025) — up 125% from RM13.72 million in 2QFY2024. It is the group's highest quarterly profit in four years since 2QFY2021, when it recorded a net profit of RM36.1 million on a revenue of RM143.85 million.

Revenue for 2QFY2025 jumped 26.9% to RM183.44 million from RM144.51 million in 2QFY2024, its bourse filing showed. Earnings per share rose to 14.74 sen from 6.54 sen. No dividend was declared.

The group's Malaysian operations posted a plantation profit of RM37.3 million in the quarter, up 54% from RM24.1 million in the same quarter last year.

Excluding depreciation, fair value changes on biological assets (net), and interest expenses, its Malaysian operations achieved an earnings before interest, taxes, depreciation, and amortisation (Ebitda) of RM47.9 million, up 38% from RM34.7 million previously.

The improved Ebitda was driven by higher average CPO prices, which rose to RM4,112 per tonne from RM3,758 per tonne a year earlier, and an increase in PK prices to RM2,646 per tonne from RM2,001 per tonne. Lower unit production costs also contributed to the stronger performance.

The Indonesian operations in Kalimantan recorded a plantation profit of RM4.5 million, rebounding from a plantation loss of RM500,000 in the same quarter last year.

Excluding depreciation, fair value changes on biological assets (net), interest income, and interest expenses, the Indonesian operations reported an Ebitda of RM8.7 million, representing a 28% growth from RM6.8 million in the corresponding quarter last year.

“Higher Ebitda in the current quarter was mainly due to higher FFB [fresh fruit bunches] production by 22% or 4,971 tonnes and higher average CPO price of RM3,717/tonne [preceding year: RM3,303/tonne] and PK price of RM2,541/tonne [preceding year: RM1,537/tonne],” said United Malacca.

In addition, United Malacca reported an investment gain of about RM600,000 for 2QFY2025, attributable to an interest income of RM700,000, fair value gains on short-term funds of RM600,000, and a net foreign exchange gain of RM400,000, offset by an interest expense of RM1 million.

For the first six months of FY2025 (6MFY2025), the group’s net profit surged 170% to RM44.21 million from RM16.4 million a year earlier as revenue increased by 23.84% RM347.32 million from RM280.46 million.

United Malacca expects FFB production to rise in its FY2025, thanks to better age profile and improvement in operational efficiency. “Assuming CPO prices remain at the current level, the group expects satisfactory results for FY2025," it said.

The group added that management's priority remains focused on improving labour productivity, mechanisation initiatives and cost efficiency as well as increasing oil yield.

United Malacca shares slipped 10 sen or 1.92% to close at RM5.10 on Thursday, translating into a market capitalisation of RM1.09 billion.