MKH Oil Palm (East Kalimantan) Berhad (MKHOP), an upstream oil palm plantation company operating in East Kalimantan, Indonesia, has reported an impressive full-year net profit of RM64.21 million for its financial year ended 30 September 2024 (FY24), marking a significant 95.78 per cent increase from RM32.8 million in FY23.
For the fourth quarter ended 30 September 2024, MKHOP posted a net profit of RM21 million, supported by revenue of RM90.59 million. Earnings per share (EPS) for the quarter stood at 2.73 sen. Full-year revenue increased by 4.16 per cent to RM352.22 million, with EPS reaching 8.25 sen.
In tandem with the strong financial performance, MKHOP declared a second interim single-tier dividend of two sen per share, payable on 30 December 2024 to shareholders whose name appear on the Company’s Record of Depositors on 13 December 2024. This brings total dividends for FY24 to four sen per share, representing an attractive yield of approximately six per cent, based on the company’s current share price of 67 sen.
The company attributed its record results to:
- Higher commodity prices: Average crude palm oil (CPO) price net of Indonesia’s export duty and levy stood at RM3,494/metric tonne (MT) for FY24, while palm kernel (PK) prices averaged RM1,820/MT.
- Improved efficiency: MKHOP recorded an oil extraction rate (OER) of 21.2 per cent for FY24, up from 20.6 per cent in FY23.
- Higher production: Fresh fruit bunch production totalled 406,657 MT during the year.
MKHOP operates with a total land area of 18,205 hectares, of which 17,009 hectares are planted. The company maintains a strong financial position, with minimal borrowings and a cash reserve of RM225.22 million as of 30 September 2024.
Tan Sri Datuk Alex Chen Kooi Chiew @ Cheng Ngi Chong, chairman of MKHOP, expressed satisfaction with the company’s achievements.
He said, “I am extremely pleased with the superb results of FY24. We will continue to enhance on our expansion programme, mechanisation, and smart app to maximise efficiencies and propel our growth moving forward. With these efforts, the Group’s prospects for financial year ending 30 September 2025 remain 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.”
The company is optimistic about the demand for CPO, citing Indonesia’s upcoming B40 biodiesel mandate, tight global vegetable oil supplies, and robust seasonal demand as key drivers.
According to Alex, MKHOP is also exploring new sustainability initiatives, including fish-rearing integration within plantations, as part of its environmental, social, and governance (ESG) efforts. Additionally, it is conducting due diligence on planned land acquisitions, with announcements to follow.
With these initiatives, Alex concluded that the Board of Directors expects satisfactory results for FY25.
MKHOP’s strong performance highlights its operation’s resilience and commitment to growth and sustainability in the competitive oil palm industry.
