Kim Loong posts record high revenue and profit for FY2023, sees CPO prices staying above RM4,000 in FY2024

KUALA LUMPUR (March 29): Kim Loong Resources Bhd, which posted a record high profit and revenue for the financial year ended Jan 31, 2023 (FY2023) on higher crude palm oil prices, expects CPO prices to stay above RM4,000 per tonne in FY2024.

In a bourse filing, the Johor-based planter said it could still benefit from the current level of CPO price, especially for its plantation operations, although the movement of CPO prices has become highly unpredictable.

In FY2023, the average CPO prices stood at RM4,898 per tonne, about 9% higher than RM4,488 in FY2022.

The group forecasts fresh fruit bunches (FFB) production for 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 palms productive area.

As for palm oil milling operations, the group expects the total processing quantity to maintain at 1.5 million tonnes of FFB for FY2024.

Kim Loong, however, added that the industry outlook remains challenging if the labour shortage problem does not improve.

The group's net profit rose 19.02% to an all-time high of RM162.56 million in FY2023 from RM136.58 million a year earlier, as revenue increased 12.08% to a record RM1.91 billion from RM1.7 billion.

For the fourth quarter, net profit rose 19.24% to RM36.92 million from RM30.96 million in 4QFY2022, supported by better performance from its milling operations due to better processing margin and higher processing volume. Earnings per share increased to 3.82 sen from 3.21 sen.

Quarterly revenue, however, dropped 13.05% to RM431.82 million from RM496.63 million, dragged by lower average FFB and CPO selling prices.

The group declared a final dividend of five sen per share, payable on Aug 29. This brings the total dividend payout for FY2023 to 15 sen compared with 14 sen paid in FY2022.

On prospects, Kim Loong said its biogas plant in Keningau, Sabah has commenced supply of power to the grid in December 2022 and it expects this plant to contribute positively to the group’s revenue in FY2024.

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

Kim Loong’s shares settled unchanged at RM1.76 on Wednesday (March 29), giving the group a market capitalisation of RM1.71 billion.