KUALA LUMPUR KEPONG BERHAD - Announcements

Chairman’s Review
KUALA LUMPUR KEPONG BERHAD
(INCORPORATED IN MALAYSIA)
It gives me great pleasure to present on behalf of the Board, the Annual Report of the KLK
Group for the financial year ended 30 September, 1999.
For the year under review your Group achieved a profit before tax of RM399.33 million,
which exceeds last year’s figure of RM367.94 million by RM31.39 million or 8.5%.
However, profit after tax and minority shareholders’ interests rose by an even bigger margin
of 35.2% from RM273.96 million to RM370.41 million. This is on account of the
Government’s one-off tax waiver on operating profits for fiscal year 1999. As a result,
earnings per share increased substantially from 38.4 sen to 52.1 sen.
The bulk of the Group’s profit are derived from its core business of plantations, principally
that of the oil palms sector. Results from our resource-based manufacturing subsidiaries
were mixed, but as a whole this sector managed a significant turnaround. The retailing
sector however, performed below expectations.
Your Board has recommended a final dividend payment of 9 sen per share less tax, plus a
special dividend of 5 sen per share less tax, which when added to the interim dividend of 6
sen per share paid earlier will make up a total of 20 sen per share for the year. As a
comparison, last year’s total dividends amounted to 25 sen per share and in terms of
absolute quantum this year’s dividend payment will amount to RM102.27 million as against
last year’s RM128.27 million.
PLANTATIONS
Plantation profit reached a record high of RM301.33 million, exceeding last year’s result of
RM287.74 million by RM13.59 million or 4.7%. Oil palms remained by far the single largest
profit generator in line with past years’ pattern, contributing in this instance 98.8% of the
total plantation profit, whilst the other two crops, rubber and cocoa saw their roles
diminishing further, as they are being progressively replaced with oil palms.
Although the year’s average price of crude palm oil (CPO) realised at RM1,711 per tonne
may not seem to be that significantly lower than last year’s figure of RM1,847 per tonne, it
however, belies the fact that there was a sharp plunge in the price level from over RM2,500
per tonne achieved at the beginning of the year to an intra-year low of below RM1,000 per
tonne before recovering to the current level of around RM1,200 per tonne, at which it
appears to have found support. Nevertheless, the increase in FFB production by 12.6% to
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