Keck Seng 2Q net profit increases 16x YoY to RM62m, highest since 2016

KUALA LUMPUR (August 26): Keck Seng (Malaysia) Bhd’s net profit for the second quarter ended June 30, 2022 (2QFY22) increased 16 times year-on-year (yoy) to RM61.6 million from 3 RM.84 million per year since.

Quarterly revenue nearly doubled to RM604.17 million from RM312.52 million in the corresponding quarter last year. Earnings per share (EPS) also swelled to 17.14 sen for the quarter under review from 1.07 sen a year ago.

According Bloomberg data, Keck Seng’s net profit in 2QFY22 was the highest since 4QFY16 which recorded RM71.49 million. Comparing the revenue of the two quarters, that of 2QFY22 was higher than the reported RM321.04 million of 4QFY16.

For the cumulative first half ended June 30, 2022 (1HFY22), Keck Seng’s net profit was RM97.7 million, more than six times the RM14.68 million posted a year ago. Its revenue also increased by 79.19% from RM564.5 million to RM1.01 billion, while EPS rose from 4.08 sen to 27.9 sen.

In a filing in Bursa Malaysia on Friday August 26, Keck Seng attributed the good results to its manufacturing segment, which achieved a better refining margin as well as a larger foreign exchange gain.

The group’s main activities in Malaysia include the cultivation and manufacture of palm oil, as well as real estate development and investment. It also owns hotels and resorts, with operations in Malaysia, Canada and the United States.

Keck Seng said its hotel segment posted a profit in 1HFY22 compared to a loss in 1HFY21, mainly due to better occupancy and average room rates for its overseas hotels.

Looking ahead, the group is broadly cautious due to the ongoing invasion of Ukraine, which has triggered global fluctuation in commodity prices, as well as the ongoing Covid-19 pandemic, state tensions United States-China-Taiwan, extreme global climate change, rising interest rates and exchange rate volatility.

“These are likely to create more global security and economic uncertainties, which could affect the group’s financial performance in 2022,” Keck Seng said.

In terms of segments, he said that although his refinery performed well in 1HFY22, the group expects performance to decline in 2HFY22.

“The Plantations Division is expected to experience a decline in FFB (Fresh Fruit Bunches) production due to severe labor shortages, despite the lifting of most travel restrictions. quotas for employing foreign workers remains a significant obstacle to recruiting labour,” he said. .

For its real estate development segment, it plans to launch the new phases of Citrine Hills in Johor consisting of two-storey townhouses in 2HFY22.

And for the hotel and resort segment, he said he expects SpringHill Suites Midtown Manhattan in New York to continue to fare better in 2HFY22.

Meanwhile, he said inflationary costs have become a significant risk to the current and foreseeable future financial performance of Tanjong Puteri Golf Resort in Johor.

On Friday, Keck Seng’s share price closed unchanged at RM3.50, bringing it a market capitalization of around RM1.27 billion.

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Keck Seng 1QFY22 net profit triples on higher palm oil selling price and land sales