Batu Kawan saw its pre-tax profit decreased by 16.2% to RM633.02 million as compared to RM755.80 million which it reported in the preceding quarter, with 3.2% lower revenue at RM6.99 billion (4Q2022: RM7.22 billion).
Notwithstanding higher CPO and PK sales volume, Plantation’s profit was 45.7% lower at RM338.35 million affected by lower CPO and PK selling prices, higher CPO production costs, a net loss of RM70.10 million from fair value changes on outstanding derivative contracts and lower fair value gain of RM6.64 million on the valuation of unharvested fresh fruit bunches.
Manufacturing’s profit dipped 21.1% to RM294.36 million while revenue was flat at RM5.77 billion (1Q2022: RM5.74 billion) mainly due to lower profit contribution from the Oleochemical division which was partially moderated by higher profit from refineries and kernel crushing operations. The Industrial Chemical division’s profit was 22.1% lower at RM41.50 million from lower sales volume and higher production costs.
Property Development’s profit decreased 51.6% to RM9.11 million (1Q2022: RM18.83 million) on 44.7% lower revenue at RM30.96 million (1Q2022: RM56.02 million). Investment Holdings/Others’ result accounted for a higher unrealised foreign currency exchange translation loss of RM45.33 million (1Q2022: RM4.21 million loss) on inter-company loans denominated in foreign currencies.
For the financial year 2023, Batu Kawan expects its Plantation financial performance to soften, affected by weaker CPO prices and escalated input costs, notwithstanding that global vegetable oils demand is likely to remain strong due to the lingering geopolitics situation. The focus will be on productivity and yield improvement initiatives with ongoing replanting of the older aged plantings.
In view of commodities price movements escalated production costs and continuing uncertainties in the global economies, the Group expects its financial performance for the current financial year to be subdued compared to the previous financial year.
