Kuala Lumpur Kepong : KLK's Net Profit Eases to RM231.5 mil in 2Q FY2023

KUALA LUMPUR KEPONG BERHAD

197301001526 (15043-V)

Wisma Taiko, No 1 Jalan S.P. Seenivasagam 30000 Ipoh, Perak Darul Ridzuan, Malaysia

1. [phone]xxxx xxxF: [phone] www.klk.com.my

FOR IMMEDIATE RELEASE

KLK's net profit eases to RM231.5 million in 2Q FY2023

24 May 2023

PETALING JAYA, 24 MAY 2023: Kuala Lumpur Kepong Berhad's ("KLK" or the "Group") net profit eased to RM231.5 million and RM714.3 million respectively for the second quarter (2QFY2023) and six-month period (1HFY2023) of the financial year ending 30 September 2023.

The Group reported a significantly lower profit before tax ("PBT") of RM299.5 million for the 2QFY2023, against RM783.3 million a year ago; while reported 1HFY2023's PBT of RM894.9 million versus RM1.7 billion for 1HFY2022. Included in the Group's PBT for the current quarter was share of equity loss of RM169.7 million from an associate, Synthomer Plc, against share of equity profit of RM10.1 million a year ago. The Synthomer's losses were predominantly caused by a business division impairment loss, amortisation of acquired intangibles, restructuring and site closure costs.

The softer performance of the Group is primarily attributable to lower contribution from the major contributors of the Group's Plantation and Manufacturing business segments. The Plantation profit came in lower by 32% against RM423.3 million in 2QFY2022, due to lower crude palm oil ("CPO") and palm kernel ("PK") prices realised and higher cost of production despite achieving an improved CPO and PK sales volume.

Meanwhile, the Group's Manufacturing division, registered quarterly PBT of RM186.0 million in 2QFY2023, representing 50% drop from RM377.9 million a year ago. The lower profits contributions from Oleochemical, refineries and kernel crushing operations reflects the challenging macroeconomic environment and weak consumer demand.

The Group expects its financial performance for FY2023 to be significantly lower.

KLK Group Chief Executive Officer Tan Sri Dato' Seri Lee Oi Hian said:

"As a Group, we have made concerted efforts to continuously improve estate management, especially in acquired estates, and clearing of backlog operational works with the return of adequate guest workers in Peninsular Malaysia. However, we expect CPO price to be within current level, supported by the forecast of El Niño, which will impact production."

"For the Group's Oleochemicals, we will continue to focus on the expansion of product applications and sustainability efforts to meet the expectations of our customers, although softer demand is being felt."

"Notwithstanding the challenging second half of FY2023, our focus is to continue to improve our efficiencies."

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About Kuala Lumpur Kepong Berhad (KLK)

KLK started as a plantation company more than 100 years ago and today, the development of oil palm remains the Group's core business. As of September 2022, KLK has about 300,000 hectares of planted area. Our landbank is spread across Malaysia (Peninsular and Sabah), Indonesia (Belitung Island, Sumatra, as well as Central and East Kalimantan) and Liberia.

Since the 1990s, KLK has diversified into resource-based manufacturing (oleochemical, derivatives and specialty chemicals) and vertically integrated its upstream and downstream businesses. The Group has since expanded its manufacturing operations resulting in internationally-scaled oleochemicals operations in China, Switzerland, Germany, The Netherlands, Belgium and Italy.

The Group, started capitalising on the strategic location of its land bank in Peninsular Malaysia by branching into property development in 1990. Our first foray into property development was Sierramas in Sungai Buloh, a joint venture with Tan & Tan Development Bhd. It is presently focused on Bandar Seri Coalfields, a 1,001-acre township in Sungai Buloh, and Caledonia in Ijok.

For more information, please contact:
Rosalynn Poh	Annabelle Chu
Head of Corporate Communications	IR Manager
[e-mail]	[e-mail]

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