(Updates with company comment in third paragraph.)
Feb. 22 (Bloomberg) -- Kuala Lumpur Kepong Bhd., Malaysia’s third-biggest listed palm oil producer, said first-quarter profit rose 12 percent after it got more for its edible oil and rubber, as well as better contributions from its refineries.
Net income climbed to 341 million ringgit ($113 million), or 32 sen a share, in the three months ended Dec. 31, from 304.2 million ringgit, or 29 sen, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange today. Revenue advanced 21 percent to 2.92 billion ringgit.
“With our crude palm products prices reasonably hedged by forward sales and the expectation of higher fresh-fruit-bunches production, the group anticipates good plantations profit for the current financial year,” the Perak-based company said in the statement. “Despite the uncertain economic environment, the prevailing palm oil price has held on reasonably well, supported by strong fundamentals and the drought situation in South America, India and China.”
Hot and dry weather in major soybean-producing countries Argentina and Brazil have damaged crops, reducing global vegetable oil supplies. Dorab Mistry, director of Godrej International Ltd., has forecast a bull market in palm oil this year as demand growth outstrips the projected increase in production. The price may reach 4,000 ringgit by June, Mistry forecast in December.
KL Kepong got an average 2,753 ringgit per metric ton for its palm oil in the quarter, compared with 2,678 ringgit in the same period a year earlier. Palm oil gained 9.3 percent in the quarter ended Dec. 31. Profit from the company’s core plantations business rose 24.5 percent to 391.7 million ringgit on better selling prices for palm oil and rubber, and higher fresh fruit bunch production, it said. Earnings were also boosted by its refinery operations.
The group posted a lower profit of 3.9 million ringgit in its oleochemical division from 23.1 million ringgit a year earlier, it said.
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