KUALA LUMPUR (June 28): Oil palm plantations operator and palm oil miller Kim Loong Resources Bhd’s net profit for the first quarter ended April 30, 2023 (1QFY2024) fell 19.67% year-on-year (y-o-y) to RM31.51 million from RM39.23 million, mainly due to sharp declines in average selling prices of fresh fruit bunches (FFB) by 39% and palm oil by 36%.

Earnings per share decreased to 3.26 sen from 4.06 sen in 1QFY2023. Quarterly revenue dropped 35.91% to RM326.69 million from RM509.74 million, the group’s Bursa Malaysia filing showed.

However, for the current year-to-date, FFB production was higher by 19% y-o-y while crude palm oil production was 4% higher y-o-y, it said.

Looking ahead, Kim Loong said the plantation industry's outlook remains challenging given the commodity price volatilities, labour shortages, inflationary pressures on cost, persisting weather extremities and biofuel policy changes.

However, the group forecasts its FFB production for the financial year ending Jan 31, 2024 (FY2024) to be 15% higher than the quantity achieved in FY2023 on account of more replanted area coming into maturity and better age profile of young palm productive area.

“As for palm oil milling operations, the management expects to achieve a total processing throughput of 1.5 million MT (metric tons) of FFB for the current financial year,” said the group.

In addition, Kim Loong also expects its biogas plant at Keningau, which commenced the supply of power to the grid in December last year, to contribute positively to its revenue as well as profit in FY2024.

“On the other hand, our biogas plant at Telupid is expected to commence operations in the second half of the financial year 2024,” it added.

On Wednesday, Kim Loong’s share price closed flat at RM1.77, with a market value of RM1.72 billion.