Kim Loong sees higher 1HFY25 net profits

KUCHING (Sept 30): Kim Loong Resources Bhd’s (Kim Loong) annualised net profit for its first half of financial year 2025 (1HFY25) net profit was within AmInvestment Bank Bhd’s (AmInvestment Bank) forecast but 12 per cent above consensus.

This comes as Kim Loong’s net profit climbed by 18.9 per cent year on year (y-o-y) to RM89 million in 1HFY25 on the back of higher milling margins and stronger plantation earnings.

In 1QFY25, Kim Loong raised the milling charge to RM80 per tonne from a range of RM50 to RM75 per tonne as compliance and diesel costs rose.

“Its plantation earnings before interest and tax (EBIT) expanded by 13.8 per cent y-o-y to RM67.7 million in 1HFY25, underpinned by a 2.2 per cent increase in fresh fruit bunch output, lower fertiliser costs and higher CPO price.

“Average CPO price was RM4,087 per tonne in 1HFY25 versus RM3,911 per tonne in 1HFY24.”

Meanwhile, its milling EBIT surged to RM66.4 million in 1HFY25 from RM56.2 million in 1HFY24 fuelled not only by higher milling fees but also by increased sales of electricity.

To note, Kim Loong commissioned its 2MW biogas plant in Keningau in 4QFY24.

Milling EBIT margin rose to 8.6 per cent in 1HFY25 from 8.1 per cent in 1HFY24. Milling accounted for 49.5 per cent of Kim Loong’s EBIT in 1HFY25 while plantation made up a larger 50.5 per cent.

“Comparing 2QFY25 against 1QFY25, Kim Loong’s net profit slid by 20.2 per cent to RM39.5 million dragged by lower milling earnings and a weaker CPO price.

“Average CPO price eased to RM3,999 per tonne in 2QFY25 from RM4,180 per tonne in 1QFY25. FFB output grew by 5.9 per cent q-o-q in 2QFY25.

“Milling EBIT dived 28.6 per cent quarter on quarter to RM27.7 million in 2QFY25 as the oil extraction rate declined to 20 per cent from 20.6 per cent.

“EBIT margin slipped to seven per cent in 2QFY25 from 10.2 per cent in 1QFY25.”