KLK Land post higher profits in Q1, amid Covid-19 pandemic

Kuala Lumpur Kepong (KLK) Berhad, one of the biggest plantation companies in Malaysia says its property development segment posted higher profits in the first quarter ended December 31, 2020 (1QFY2020).

Profit rose 62.2 per cent to RM22 million as compared with RM13.6 million recorded in 1QFY2020, despite the Covid-19 pandemic and weak market sentiments.

KLK said in a filing with Bursa Malaysia yesterday that the property segment achieved higher profit although there was marginal improvement in revenue.

The group’s property arm, KLK Land achieved revenue of RM53.5 million as compared with RM52.2 million recorded in the same quarter a year ago.

KLK said the higher earnings were due to recognition of profits from projects with better margins.

The group did not disclose the projects with better margins.

According to KLK Land website, the company’s on-going projects are The Walden comprising 75 units of single-storey and double-storey bungalows; and, Hampton Residences featuring 191 units of super link houses, semi-detached homes and bungalows.

Both the projects are located within the 400-odd hectare Bandar Seri Coalfields in Sg Buloh, Selangor. Bandar Seri Coalfields, launched in 2011, is an integrated township with a total gross development value (GDV) of RM5.6 billion.

Upcoming properties in Bandar Seri Coalfields are 232 units of double-storey terraced houses, the website showed.

The resort-themed bungalows at The Walden are selling from RM1.8 million to about RM3.5 million (built-up from 2,896 sq ft to RM3,870 sq ft), according to the latest listings in iproperty.com.my.

Hampton Residences is a hilltop guarded development with spacious home designs, living with nature. There are a total of 344 units of super link houses, semi-detached homes, and bungalows. The launch price is starting from RM1.16 million.

KLK’s three other business segments are plantation, manufacturing, and investment holding.

The group’s pre-tax profit for 1QFY2020 improved significantly by 90.1 per cent to RM493.9 million (1QFY2020: profit RM259.8 million) on the back of a 5.5 per cent increase in revenue to RM4.3 billion (1QFY2020: RM4.077 billion).

MIDF Research has revised upward its target price for KLK to RM25.06 from RM22.88 previously.

The research house highlighted KLK’s better earnings in Q1FY2020, driven by improved contributions from all its business sectors, especially the plantation segment.

MIDF Research said in a research note today that the Q1FY2020 net earnings was above the firm’s expectation at 34.2 per cent of full-year estimate, but within consensus at 26.87 per cent.

It anticipates better performance in property sales in the coming quarter on the back of more relaxation of movement control order rules.

Source: NST