MKH Oil Palm (East Kalimantan) Berhad (“MKHOP”), an upstream oil palm plantation company based in East Kalimantan, Indonesia, reported a stellar net profit of RM21 million on the back of revenue of RM90.59 million for its fourth quarter ended 30 Sep, 2024. Earnings per share (EPS) stood at 2.73 sen for the quarter.

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

The good results were driven by a combination of higher crude palm oil (CPO) and palm kernel (PK) prices, which have been steadily trending up.

Its efficiency levels also improved, with the company generating a higher oil extraction rate (OER) of 21.2% for the financial year ended 30 Sep 2024 (FY24), compared to 20.6% in FY23.

Meanwhile, the stellar quarterly results brought MKHOP’s net profit for the full year ended Sep 30, 2024 (FY24) to jump 95.78% to RM64.21 million from RM32.8 million in FY23.

Over the same period, revenue increased by 4.16% to RM352.22 million. This brings the company’s full year EPS to 8.25 sen.

Along with the financial results, MKHOP further declared a second interim single tier dividend of 2 sen per share to be paid on 30 December 2024 to shareholders whose name appear on the Company’s Record of Depositors on 13 December 2024. To recap, a first interim single tier dividend of 2 sen per share was already paid on June 12, 2024.

Thus, this would bring total dividends declared in FY24 to 4 sen per share, or a yield of approximately 6% based on MKHOP’s current share price of 67 sen.  

For the fourth quarter, the average CPO price per metric tonne (“MT”) net of Indonesia’s export duty and levy, stood at RM3,592, while average PK price per MT stood at RM2,352.

For the full year of 2024, the average CPO/MT net of Indonesia’s export duty and levy, and PK/MT price for MKHOP stood at RM3,494 an RM1,820 respectively. It also recorded total production of fresh fruit bunches of 406,657 MT for this period.

To date, MKHOP has a total land area of 18,205 ha, with a planted area of 17,009 ha. 

Financially, MKHOP remains strong and has almost no borrowings. It has a cash pile of RM225.22 million as of Sep 30, 2024.

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

“I am extremely pleased with the superb results of FY24. We will continue to enhance on our expansion program, mechanization and smart app to maximize efficiencies and propel our growth moving forward.

With these efforts, the Group’s prospect for financial year ending 30 September 2025 remains well-supported with strong market demand for CPO, which had been trading at approximately RM3,800/MT to RM4,300/MT (nett of export levy and duty) in Indonesia.

There has been stable demand for CPO; bolstered in part by Indonesia’s planned adoption of biodiesel mandate in January 2025 from B35 biodiesel to B40 biodiesel, the relatively tight global supply in other vegetable oils and fats, and strong seasonal demand.

Separately, the company is in the midst of conducting its due diligence exercise for its planned land acquisitions. The relevant announcements will be made in stages in the near future.

The company is also currently researching on the integration of fish-rearing within its plantations to boost efficiency and as part of its environmental, social, and governance efforts.

Given the above, the Board of Directors expect the Group to achieve satisfactory results for the financial year ending 30 September 2025.”

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