MKH Oil Palm (East Kalimantan) Berhad (MKHOP), an upstream oil palm plantation company operating in Indonesia, has announced a net profit of RM16.10 million for the third quarter ending 30 June 2024, supported by revenue of RM93.28 million. The company achieved earnings per share (EPS) of 2.09 sen for the quarter. This robust performance was attributed to strong sales of crude palm oil (CPO) and palm kernel products, alongside ongoing operational efficiencies.
As the company was only listed on the main market of Bursa Malaysia Securities Berhad on 30 April this year, there are no comparative figures for the corresponding quarter of the previous year.
During the quarter, the average selling price of CPO per metric tonne (MT) was RM3,658, while palm kernel (PK) averaged RM1,890 per MT.
MKHOP's financial health remains strong, with almost no borrowings, placing the company in a net cash position. As of 30 June 2024, the company held RM199.65 million in cash. The company's net assets per share stood at 56 sen for the quarter.
For the nine months ending 30 June 2024, MKHOP recorded a cumulative net profit of RM43.21 million on revenue of RM261.63 million. This marks a 38% increase compared to the net profit of RM31.25 million for the financial year ended 30 September 2023, as reported in the company's prospectus prior to its listing. The EPS for the nine-month period was 5.53 sen, with average CPO and PK prices at RM3,462 and RM1,648 per MT, respectively.
MKHOP Chairman, Tan Sri Dato' Alex Chen Kooi Chiew @ Cheng Ngi Chong, expressed optimism for the company's future, citing strong market demand for CPO, which has been trading at approximately RM3,650/MT in Indonesia. He highlighted the company's strong cash position and plans to expand its landbank to capitalise on growth opportunities in the global edible oils market and the Indonesian oil palm industry.
In a separate announcement on 16 August 2024, MKHOP informed Bursa Malaysia of its intention to seek shareholders' approval at the upcoming Extraordinary General Meeting on 10 September 2024, for a share buyback of up to 5% of its total issued shares. This move is expected to stabilise the company's share price and enhance capital structure efficiency by better utilising surplus financial resources.
With a positive outlook for the remainder of the financial year ending 30 September 2024, MKHOP is well-positioned to achieve strong results and pursue growth opportunities.