
Kim Loong’s 3QFY25 within analysts’ range
KUCHING (Jan 1 2025): East Malaysian planter Kim Loong Resources Bhd’s (Kim Loong) results for the third quarter of financial year 2025 (3QFY25) came in above TA Securities Holdings Bhd (TA Securities) expectation, primarily driven by stronger-than-expected margins.
Despite a relatively flat revenue growth, Kim Loong recorded a 4.8 per cent year on year (y-o-y) growth in core net profit, reaching RM49.5 million in 3QFY25.
“Cumulatively, the core net profit grew by 12.3 per cent y-o-y to RM137.5 million, supported by a 6.9 per cent rise in revenue. This growth was primarily attributed to higher FFB production and higher palm oil prices.
For Kim Loong’s plantation division, its operating profit for the first nine months of FY25 (9MFY25) increased by 17.2 per cent y-o-y to RM105 million, primarily driven by an 8.4 per cent y-o-y rise in the price of fresh fruit bunch (FFB) to average RM778 per tonne.
However, the FFB production declined by one per cent y-o-y to 241,300 tonnes.
For its palm oil milling in the 9MFY25 period, operating profit climbed 13.1 per cent y-o-y to RM103.9 millionn, supported by improved processing margins and milling efficiency.
Furthermore, the average selling prices (ASPs) of crude palm oil (CPO) rose 6.3 per cent y-o-y to RM4,097 per tonne.
TA Securities revised Kim Loong’s FY25 and FY26 earnings forecasts upward by 16 and two per cent, respectively, following better-than-expected 3QFY25 results and improved margins.
Additionally, it introduced its FY27 earnings forecast of RM142.8 million.
“Management now expects FY25 FFB production growth to be around three to five per cent lower than last year versus the previous guidance of five per cent growth.
“This revision reflects a lower-than-expected production from the group痴 estates in Sabah, particularly in the Keningau region.
“Meanwhile, the group resumed its replanting efforts in FY23 and plans to replant approximately 1,000ha in FY25, a significant increase from 350ha replanted in FY24. As of 9MFY25, the group has already replanted 900ha.”
Regarding the palm oil milling operations, the total FFB processing volume for FY25 is projected to reach approximately 1.6 million tonnes.
TA Securities expect a more cautious outlook for CPO prices, influenced by softer exports and demand from major importing countries, along with an anticipated increase in global vegetable oil supply.
-Agency