KUALA LUMPUR (Feb 28): Kuala Lumpur Kepong Bhd (KL:KLK) on Friday reported a 2.9% year-on-year fall in its first-quarter net profit, as the plantation group's other businesses — manufacturing, property and investments — recorded subdued results.

The net profit for the three months ended Dec 31, 2024 (1QFY2025) was RM220.46 million, against RM226.94 million a year ago. Earnings per share slipped to 20.1 sen from 21 sen.

Corporate expenses of RM50.6 million and foreign exchange losses of RM33.9 million also weighed on the group’s earnings, KLK said in a bourse filing.

Quarterly revenue was 5.5% higher at RM5.95 billion compared with RM5.64 billion in 1QFY2024, driven by higher crude palm oil (CPO) and palm kernel (PK) prices.

The average CPO price increased 15.8% year-on-year to RM4,018 per tonne, while the average PK price rose 62.4% to RM2,924 per tonne.

“However, the improvement of result was partially offset by a drop in PK sales volume, and a net loss of RM9.8 million [versus net gain of RM1 million in 1QFY2024] from fair value changes on outstanding derivative contracts,” KLK said.

On a quarter-on-quarter basis, KLK’s quarterly net profit expanded by more than 32 times from the RM6.77 million posted in 4QFY2024. Revenue grew 4.7% from RM5.68 billion.

The group did not declare any dividend for the quarter.

KLK, in which Batu Kawan Bhd (KL:BKAWAN) owns a 48.2% stake, said it is optimistic that its financial performance in FY2025 results will be better than the previous year.

“The plantation segment will remain the key earnings driver for the group as CPO prices are expected to stay above RM4,000 per tonne. The oleochemical sub-segment is anticipated to support the performance of the manufacturing segment with the contribution from new capacities in Europe and Asia,” it said.

The group’s manufacturing segment fell into the red as it incurred a net loss of RM53.4 million in 1QFY2025, dragged by the losses from the non-oleochemical division.

The property segment’s profit fell 36.6% to RM7.5 million as it recorded a lower revenue of RM44.1 million, while the investment segment posted bigger losses of RM58.1 million due to higher net interest expense on increase in borrowings and lower profit from the farming sector.

KLK shares finished down 52 sen or 2.46% to RM20.62 on Friday, valuing the group at RM22.66 billion.

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