KUALA LUMPUR (May 22): Batu Kawan Bhd’s net profit for the second quarter ended March 31, 2017 (2QFY17) climbed 73% to RM163.3 million, from RM94.4 million a year ago, thanks to sharply higher plantations' contribution.
Revenue climbed 47% to RM5.6 billion, from RM3.8 billion, with gains recorded in not just its plantations segment, but also in its manufacturing and property development segments, its Bursa Malaysia filing today showed.
The group declared an interim dividend of 15 sen for the financial year ending Sept 30, 2017 (FY17) to be paid on Aug 10.
According to Batu Kawan, its plantations segment reported RM368.4 million in profit, compared with RM130.9 million a year ago (2QFY16), resulting from higher crude palm oil (CPO) and palm kernel selling price, and fresh fruit bunch (FFB) production.
Its plantation arm, Kuala Lumpur Kepong Bhd, recorded a 72% jump in net profit to RM289.57 million in the same quarter, from RM168.53 million a year ago, thanks to strong crude palm oil (CPO) and palm kernel (PK) selling prices. KLK's revenue grew 48% to RM5.47 billion for 2QFY17, from RM3.7 billion.
The strong plantations earnings mitigated profit falls at Batu Kawan's manufacturing and property development segments.
The manufacturing segment posted a 34% profit fall to RM83.2 million in 2QFY17, from RM126.2 million a year ago, although revenue grew 42% to RM2.7 billion, compared with RM1.9 billion in 2QFY16. This was mainly because its oleochemicals' profit halved on higher raw material costs, though this was mitigated by a 20% higher chemicals profit as caused by higher sales volume at better prices.
Its property development segment's profit fell 76% to RM1.21 million during the same period, from RM4.95 million a year ago, although revenue grew to RM22.88 million, from RM15.65 million.
For the first-half ended March 31, 2017 (1HFY17), net profit dropped 25% to RM360.8 million, from RM482 million in the previous corresponding quarter, although revenue gained 36% to RM11.2 billion, from RM8.3 billion in 1HFY16, mainly because the year before had included a RM485.6 million surplus from sale of plantation land to an associate.
Moving forward, Batu Kawan said its plantations performance for FY17 is expected to be better, based on achievement and committed forward sales for the half year.
“The profitability of the oleochemical business is expected to be challenging, although its business performance is anticipated to recover in the second half of FY17.
“As for the chemicals division, profit from the chlor-alkali business is projected to be favourable, while the sulphuric acid business has been restructured to remain competitive,” it added.
Overall, the group anticipates a satisfactory profit for FY17.
Batu Kawan shares slid 10 sen or 0.54% to RM18.40 today, for a market capitalisation of RM7.46 billion.