01/08/2022 (The Malaysian Reserve) - KULIM (M) Bhd recorded its profit before tax and zakat in the financial year Dec 31, 2021 (FY21) of RM433.81 million from a loss of RM316.45 million in the previous year.

The group said its FY21 result was driven by palm oil prices and its improved operational efficiencies.

Its revenue surged by 48.56% to RM1.65 billion from RM1.11 billion previously despite lower sales volumes and yields from its plantations.

“This was achieved on higher average selling prices for crude palm oil (CPO) and palm kernel, which increased by 60.66% and 77.64% respectively,” it said in a statement today.

Kulim, a wholly owned subsidiary of Johor Corp Bhd also saw its FY21 return to the black due to lower impairment and provision expenses compared to a year earlier.

“Under the circumstances, Kulim still managed to harvest 20.11 metric tonnes per ha (MT/ha) from 22.93 MT/ha in 2020, which was higher than the industry average in Johor and Peninsular Malaysia of 17.73 MT/ha and 16.24 MT/ha respectively,” it noted.

In the same period, the group processed a total of 1.42 million MT of fresh fruit bunches and produced 295,747 MT of CPO.

Its oil extraction rate fell 20.83% versus 21.04%, however, it remained higher than the industry average of 19.68% for Peninsular Malaysia and 19.92% for Malaysia as a whole.

Kulim MD Mohd Faris Adli Shukery said the group FY21 is one of its best financial results to date despite sub-optimum production and yield as well as insufficient manpower.

“We were naturally pleased with our financial windfall, yet it was with even greater pleasure to see the group gradually shape up into the agriculture-focused, digitally enhanced and sustainably run organisation that we envisage at the end of our current transformation journey,” he said.

Moving forward, Kulim is now set to expand its foray beyond oil palm plantation into an integrated agribusiness player.

The group is looking to strengthen its position in the midstream and downstream through partnerships and/or acquisitions of refineries and palm kernel crushing plants.

It is also expanding its livestock business of cattle and sheep while exploring the possibility of partnering with a dairy producer.

Notably, Kulim is looking at building a robust and thriving agri-food portfolio to contribute positively to the national food security agenda.

“Our ultimate objective is for Kulim to become a flagship company that can enhance the state and national food security agenda.

“We will seek to establish a food marketplace for smallholders, large private players and government-linked companies,” he further said.

Kulim’s new business segment, agro-farming includes intensive farming and mono-crop to supply quality vegetables and fruit for the Malaysian market via adopting IR4.0 technology to further enhance crop management while leveraging automation to reduce labour requirements.

Meanwhile, the group is rolling out a structured environmental, social and governance framework which will align its sustainability initiatives with its vision, strategy and goals.

“Kulim is targeting to halve its carbon footprint by 2025 and has invested in expanding its renewable energy infrastructure in biogas plants that have helped cut the group’s methane emissions by 90%,” it added.

This is in line with the group’s business direction to expand its potential in green business which is expected to contribute positively to its earnings, as a new income stream.

https://themalaysianreserve.com/2022/08/01/kulim-returns-to-black-in-fy21-on-palm-oil-prices/