Kretam confident of outlook after 1Q profit jumps 71%
The group said it continues to adapt by implementing strategic measures aimed at mitigating industry-related risks, emphasising prudent cost control and increasing yield and productivity through advanced technologies and innovative practices.
For the first quarter ended March 31, 2025 (1Q25), Kretam's net profit soared 71.1% year-on-year to RM28mil, bringing earnings per share to 1.22 sen, despite revenue falling 5.1% to RM167.1mil.
While a decline in fresh fruit bunch (FFB) production volume led to lower turnover, the improvement in net earnings was attributed to higher average selling prices (ASPs) of FFB, CPO and palm kernel (PK).
The group said lower estate upkeep cost – due to to reduced spending on manuring, weeding and road maintenance as a result of heavy rainfall during the quarter – also contributed to the bottom line.
Kretam added that better margins from palm methyl ester sales, driven by overall lower cost of sales and higher average selling prices, further boosted net profit.
Compared to 4Q24, however, revenue decreased by 28% from RM233.3mil, while net profit dropped 63% from RM75.9mil.
This was mainly due to higher sales volume and ASPs for CPO and PK in the previous quarter, a fair value gain on investment securities of RM 2.6mil compared to RM23.8mil in 4Q24, and dividend income of RM 3.9mil received in 4Q24.
Kretam declared an interim dividend of 1.5 sen per share for 1Q25.
The group expects CPO prices to remain volatile throughout the year, influenced by factors such as anticipated improvements in production in the upcoming quarters, as well as broader global issues driving uncertainty in equity and commodity markets.
The planter is particularly concerned about the unpredictable nature of international trade policies, as well as geopolitical tensions between Russia and Ukraine.
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