Kim Loong lowers production target by 6 pct to 310,000 tonnes

Kuala Lumpur - Oil palm producer Kim Loong Resources Bhd has cut its production target for fresh fruit bunches (FFB) by six percent to 310,000 tonnes for the fiscal year ending January 31, 2027. This adjustment was made after taking into account lower-than-expected FFB production in the first half of the year, as well as the improved age profile of productive palms and the company's ongoing replanting program. Kim Loong plans to replant around 700 hectares during the fiscal year 2027.

In its Q2 FY27 filing with Bursa Malaysia, the group reported a five percent drop in net profits to RM44.94 million, compared to RM47.3 million in the same quarter last year. This decline was driven by a three percent decrease in revenue to RM422.76 million. The revenue dip was partially attributed to a 17 percent reduction in FFB production during the quarter, falling to 72,438 tonnes, resulting in a 15 percent lower yield per hectare of 5.23 tonnes. However, a 14 percent increase in average FFB price helped mitigate the impact during this period.

Despite the weak performance in the second quarter, Kim Loong's first half net profits were 12 percent higher than the previous year, at RM100.12 million, thanks to better results in the first quarter. The company declared an interim single tier dividend of five sen for FY27. Looking ahead, Kim Loong anticipates achieving an optimum processing throughput of 1.6 million tonnes for its palm oil mills.

The company expects the impact of the lower FFB production target to be partially offset by a better average crude palm oil (CPO) price, which is projected to range between RM4,500 and RM4,800 per tonne for FY27.