Kim Loong expects 10% increase in production
The Star
Thursday July 3, 2008
By LAALITHA HUNT
PETALING JAYA: Kim Loong Resources Bhd expects more than 10% increase in production from both its plantation and milling operations for the financial year ending Jan 31, 2009.
Managing director Gooi Seong Heen said the outlook for the current year remained positive with crude palm oil (CPO) price maintaining its upward trend.
“We expect to do better this financial year compared with the last,” he told StarBiz yesterday.
The group continued to benefit from the high CPO prices and saw revenue more than double to RM136.3mil for the first quarter ended Apr 30 against RM68mil in the previous corresponding period.
Net profit increased to RM21mil for the first quarter ended Apr 30 from RM4.6mil previously.
The company attributed the higher profit to improved margins of the mills and better capacity utilisation of its Keningau mill in
The group, which enjoys an average oil extraction rate of about 21% from both its mills in Keningau and Kota Tinggi, does not expect significant contribution for the current financial year from its new mill, which would be commissioned in three months in Telupid, Sabah.
The group also expects additional revenue and profit contribution from downstream activities such as sales of carbon credits, bio-fertilisers and palm fibre oil.
“We will be commissioning the new biogas plant in three months and a palm fibre oil extraction plant by early next year,” Gooi said, adding that these plants were in Keningau.
Meanwhile, the rise in fertiliser costs had deeply impacted the group’s bottomline, he said.
“Fertiliser costs have risen by 200% to 300% over the last one year. As a result, our production cost has increased from RM800 per tonne of CPO to RM1,100 per tonne,” he said, adding that there was a possibility that fertiliser prices would rise further.
He added that the sharp price hike was due to supply shortage.
Gooi also said while recent hike in fuel prices had resulted in higher distribution costs for the group, the impact was minimal on production cost when compared with the impact of fertiliser costs.
