KUALA LUMPUR (May 24): Batu Kawan Bhd’s net profit fell to RM120.05 million in the second quarter ended March 31, 2023 (2QFY2023) against RM316.54 million in the preceding year's corresponding period (2QFY2022) owing to lower contribution from its plantation and manufacturing segments. The group has warned that the second half is projected to be "significantly weaker" than the corresponding period last year on the back of waning consumer demand.

The group declared an interim dividend of 20 sen per share, payable on Aug 3, with the ex-date on July 10 and the entitlement date on July 11.

Earnings per share for the quarter dropped to 30.51 sen from 80.29 sen, according to a bourse filing on Wednesday (May 24).

Revenue for the quarter shrank by 5.11% to RM6.31 billion from RM6.65 billion.

Batu Kawan's plantation segment posted a lower profit of RM291.68 million due to decreasing crude palm oil (CPO) and palm kernel (PK) selling prices, as well as higher CPO production costs and estimated fair value loss of RM15.76 million on unharvested fresh fruit brunches (FFB) valuation.

Profit for the manufacturing segment also dipped to RM219.59 million as its oleochemical division, refineries and kernel crushing operations raked in lower contributions.

For the cumulative six-month period (6MFY2023), net profit fell by 45.1% to RM355.36 million from RM647.27 million in the same period a year earlier (6MFY2022), while revenue dipped to RM13.3 billion from RM13.76 billion.

Batu Kawan said its plantation results are projected to soften compared wth the same period last year in view of weakness in CPO prices due to economic concerns in key consuming countries.

“With the resumption of guest workers' supply in peninsular Malaysia, focus will be on estate management and yield improvement initiatives,” it said, adding that its manufacturing segment will remain challenged amid weakness in consumer demand for both oleochemical and industrial chemicals.

“Overall, the group expects its financial performance for the second half of financial year 2023 to be significantly weaker compared with the previous financial year.”

Batu Kawan closed 12 sen or 0.55% lower at RM21.68, for a market capitalisation of RM8.66 billion.