Latest news with #KualaLumpurKepongBerhad
BusinessToday
22-05-2025
- Business
- BusinessToday
KLK 2Q Profit Falls To RM154 Million, Hit By Overseas Associate Losses, FX Impact
Kuala Lumpur Kepong Bhd Kuala Lumpur Kepong Berhad (KLK) posted a lower net profit of RM154 million for its second quarter ended March 31, 2025 (2QFY25), down from RM220 million in the preceding quarter, despite a rise in group revenue to RM6.3 billion, compared to RM5.9 billion in 1QFY25. On a year-on-year basis, KLK's 2Q pre-tax profit rose 15% to RM269.9 million from RM234.7 million in 2QFY24, supported by a 16.2% increase in revenue to RM6.34 billion. Segmental Performance Manufacturing The group's manufacturing segment narrowed its loss to RM38.3 million, compared to RM53.4 million in 1QFY25. The improvement was largely driven by: Higher revenue of RM5.42 billion (1QFY25: RM4.76 billion), Stronger profit contribution from the Oleochemical division, and A smaller loss from its non-oleochemical operations. However, the segment continued to be weighed down by losses in its refinery and kernel crushing operations. Property Development The property segment saw its profit slump 53.4% to RM3.5 million, from RM7.5 million in 1QFY25, on lower revenue of RM39.7 million (1QFY25: RM44.1 million), reflecting a slower property market. Investment Holding/Others This segment posted a larger loss of RM94.8 million, widening from RM58.1 million in the previous quarter. The decline came despite a stronger farming profit of RM34.6 million (1QFY25: RM186,000), as the group absorbed a RM63.3 million equity loss from its UK-listed associate Synthomer plc, which continues to face performance headwinds. Net corporate expenses increased to RM54.8 million (1QFY25: RM50.6 million), mainly due to a larger foreign exchange loss of RM40 million from the translation of intercompany loans denominated in foreign currencies. This was partly offset by a RM3.9 million gain from land sales and government acquisitions. Despite challenges in its manufacturing and investment holding arms, KLK remains supported by steady revenue growth and contributions from its oleochemical business. However, the group's near-term profitability may remain volatile due to external pressures, particularly from its overseas associate performance and currency fluctuations Related
Yahoo
18-03-2025
- Business
- Yahoo
Estimating The Fair Value Of Kuala Lumpur Kepong Berhad (KLSE:KLK)
Using the 2 Stage Free Cash Flow to Equity, Kuala Lumpur Kepong Berhad fair value estimate is RM26.43 Current share price of RM21.16 suggests Kuala Lumpur Kepong Berhad is potentially trading close to its fair value The RM22.66 analyst price target for KLK is 14% less than our estimate of fair value How far off is Kuala Lumpur Kepong Berhad (KLSE:KLK) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. See our latest analysis for Kuala Lumpur Kepong Berhad We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (MYR, Millions) RM958.1m RM1.04b RM1.23b RM1.37b RM1.50b RM1.61b RM1.72b RM1.81b RM1.90b RM1.99b Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x2 Est @ 11.79% Est @ 9.33% Est @ 7.61% Est @ 6.41% Est @ 5.57% Est @ 4.98% Est @ 4.56% Present Value (MYR, Millions) Discounted @ 8.3% RM884 RM885 RM965 RM995 RM1.0k RM998 RM980 RM955 RM925 RM893 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = RM9.5b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.3%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = RM2.0b× (1 + 3.6%) ÷ (8.3%– 3.6%) = RM43b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM43b÷ ( 1 + 8.3%)10= RM19b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is RM29b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of RM21.2, the company appears about fair value at a 20% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Kuala Lumpur Kepong Berhad as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.3%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Strength Debt is well covered by earnings. Weakness Earnings declined over the past year. Dividend is low compared to the top 25% of dividend payers in the Food market. Opportunity Annual earnings are forecast to grow faster than the Malaysian market. Current share price is below our estimate of fair value. Threat Debt is not well covered by operating cash flow. Dividends are not covered by earnings. Revenue is forecast to grow slower than 20% per year. Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Kuala Lumpur Kepong Berhad, there are three relevant items you should further examine: Risks: As an example, we've found 2 warning signs for Kuala Lumpur Kepong Berhad that you need to consider before investing here. Future Earnings: How does KLK's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every Malaysian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
02-03-2025
- Business
- Yahoo
Kuala Lumpur Kepong Berhad First Quarter 2025 Earnings: EPS: RM0.20 (vs RM0.21 in 1Q 2024)
Revenue: RM5.95b (up 5.5% from 1Q 2024). Net income: RM220.5m (down 2.9% from 1Q 2024). Profit margin: 3.7% (down from 4.0% in 1Q 2024). The decrease in margin was driven by higher expenses. EPS: RM0.20 (down from RM0.21 in 1Q 2024). All figures shown in the chart above are for the trailing 12 month (TTM) period Looking ahead, revenue is forecast to grow 6.3% p.a. on average during the next 3 years, compared to a 3.7% growth forecast for the Food industry in Malaysia. Performance of the Malaysian Food industry. The company's shares are down 1.8% from a week ago. Before you take the next step you should know about the 2 warning signs for Kuala Lumpur Kepong Berhad that we have uncovered. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
