KLK's Q4 profits jump 48pc on asset sale

This is written by my colleague Rupinder Singh.

KUALA Lumpur Kepong Bhd (KLK) says its fourth-quarter net profit jumped 48 per cent, due mainly to gains from an asset sale and it has bumped up dividends. The plantation group reported a net profit of RM460.6 million for the quarter to September 30 2011, up from RM311 million in the same period last year.

It also announced a dividend of 70 sen per share for the fourth quarter, bringing the total payout for the year to 85 sen. This is better than 60 sen a share paid out in 2010.

"The current quarter's results were boosted by the non-recurring surplus of RM200.6 million arising from the disposal of an associate, Esterol Sdn Bhd, while last year's quarter had a writeback of RM76 million on the allowance for diminution in value of investment," the company told Bursa Malaysia yesterday.

The group said it would be difficult to forecast its profit for the current financial year ending September 2012, given uncertainties in the global market and the effects of the eurozone debt crisis. 

"We are, however, confident that our plantations business fundamentals remain sound based on our commitment to improve efficiencies and productivity. The group anticipates satisfactory returns for the current year," it said.

For the final quarter, KLK's plantation sector recorded a slightly lower profit of RM447.5 million from RM454.4 million in the third quarter, due to lower commodity prices.

Meanwhile, the manufacturing sector incurred a loss of RM49.3 million compared with a profit of RM95.5 million in the previous quarter due to the eurozone sovereign debt crisis and weak global macro economic environment.

Its retailing business reported a lower loss of RM2.8 million compared with a RM7.8 million loss in the previous quarter.

For the 12-month period, net profit was up 55 per cent to RM1.57 bilion with improved performance from its plantations and manufacturing divisions.

Its plantation profit jumped 42 per cent to RM1.6 billion, driven by strong selling prices of commodities which had overshadowed the impact of higher production cost, it said.

The manufacturing sector achieved a 40 per cent increase in profit to RM201.9 million despite the loss suffered in the fourth quarter. KLK said the manufacturing division had benefited from added capacities coming onstream as well as a relatively strong business environment in the earlier part of the year.

The group also attributed the improved last quarter to the sale of associates, Esterol and Barry Callebaut Malaysia Sdn Bhd, which generated a total surplus of RM244 million.

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