Group revenue rose to RM2.42 billion from RM1.75 billion before.
When met in Ipoh yesterday, KLK chief executive officer Tan Sri Lee Oi Hian said the better results came despite the adoption of new accounting standards dubbed FRS 139. The standards have resulted in a fair value loss of RM95.4 million on derivative contracts like commodity futures and foreign exchange contracts.
For the quarter, KLK's plantations profit climbed 34 per cent to RM314.6 million, underpinned by higher average palm oil price of RM2,678 per tonne, palm kernel oil of RM1,762 and rubber sold at RM11.78 per kg.
Asked on outlook for the year, Lee said he expects good results on prospects of continued buoyant commodity prices. His optimism is underpinned by the current global demand for vegetable oils and natural rubber surpassing supply.
"For the current year, fresh fruit bunches production is likely to rise to high single-digit percentage as more trees reach their prime fruit bearing age," he told reporters after the company's annual general meeting held in Perak.
Yesterday, the third month benchmark crude palm oil futures on the Malaysian Derivatives Exchange closed at RM3,514 per tonne.
High palm oil price benefits farmers, but it also results in expensive cooking oil. This has prompted the Indonesian government to raise export tax on crude palm oil, so that cooking oil supply in the republic would be guaranteed, mitigating fears of a shortfall. Back in November 2010, crude palm oil export tax was 10 per cent. As of February 2011, it has risen sharply to 25 per cent.
Asked on the impact of Indonesia's progressive crude palm oil export tax on KLK's plantation business there, Lee replied the tax structure hurts refiners' margin, but clearly favours biodiesel and oleochemical players. "We're considering downstream activities there. We may set up an oleochemical plant in the mid term."
Lee said the company has set aside capital expenditure of about RM500 million for its plantation business."It will mostly go to putting up new palm oil mills in Indonesia, building up the basic infrastructure in the estates, like roads and bridges. We'll upgrade a couple of mills in Malaysia and carry out new plantings of about 8,000ha in Indonesia," he said.
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