MKH Oil Palm (East Kalimantan) Berhad (“MKHOP”), an upstream oil palm plantation company based in Indonesia, reported a net profit of RM16.10 million on the back of revenue of RM93.28 million for the third quarter ended 30 June, 2024. Earnings per share stood at 2.09 sen for the quarter.

This stellar performance was driven by sales of its crude palm oil and palm kernel products, besides continuous operational efficiencies implemented by the company.

There were no comparative quarterly figures, as the company was only listed on the main market of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) on 30 April this year.

For the quarter, the average CPO price per metric tonne (“MT”) stood at RM3,658, while average PK price per MT stood at RM1,890.

Financially, MKHOP has almost no borrowings and is in a net cash position. As at 30 June, 2024, the company has a cash pile of RM199.65 million.

The company’s financial strength is further backed by net assets per share attributable to shareholders at 56 sen, for the quarter.

Meanwhile, for the nine months ended 30 June, 2024, MKHOP achieved cumulative net profit of RM43.21 million on the back of revenue of RM261.63 million.

Based on the company’s prospectus prior to its listing on the main market of Bursa Malaysia, MKHOP recorded net profit of RM31.25 million for the financial year (“FY”) ended 30 September, 2023.

This means that MKHOP’s nine months net profit for FY24 has already exceeded its FY23 results by 38%.

For the nine-month period, MKHOP’s EPS stood at 5.53 sen. The average CPO/MT and PK/MT selling price for this period stood at RM3,462 and RM1,648 respectively.  

MKH Oil Palm (East Kalimantan) Berhad Chairman Tan Sri Dato’ Alex Chen Kooi Chiew @ Cheng Ngi Chong said:

“The Group’s prospects for the financial year ending 30 September, 2024, remains well-supported with strong market demand for CPO, which had been trading at approximately RM3,650/MT (nett of export levy and duty) in Indonesia.”

“We are well positioned to benefit from growth in the global edible oils market and the oil palm industry in Indonesia as there is increasing demand for edible oils and fats globally.”

“With our strong cash position, we are also actively on the lookout for new oil palm plantation land in order to grow our landbank and revenues.”

“Based on the above, we are optimistic on the group’s future prospects and results for the financial year ending 30 September, 2024.”

In a separate announcement on 16 August, 2024, MKHOP has announced to Bursa Malaysia that it is seeking shareholders’ approval at the forthcoming EGM on 10 September 2024, to purchase not more than five percent (5%) of its total number of issued shares at any point in time.

The advantages of this proposal include to stabilise MKHOP’s share price and to enable MKHOP to utilise its surplus financial resources more efficiently resulting in a more efficient capital structure.

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