02/11/2010 (The Malaysian Insider), Kuala Lumpur — Planter Kulim expects profits for FY 2010 to be “much higher” than last year’s RM146 million, driven by its expansion into Papua New Guinea (PNG) and a rally in palm oil prices.

Profits ending December 31 would also benefit from the sale of an oleochemical plant to Singapore’s Wilmar for US$140 million (RM434 million), Kulim’s chief operating officer Zulkifli Ibrahim told Reuters in an interview today.

“We expect strong growth in 2010 earnings due to high average selling price of crude palm, the one-time income from the sale of the oleochemical business and strong growth at the food division,” Zulkifli said.

Kulim derives about 60 per cent of its profits from its plantations business in Malaysia as well as PNG, where it operates via London-listed unit New Britain Palm Oil (NBPOL).

The rest comes from its food business via QSR Brands, which licenses fast-food chains including KFC.

Analysts expect a profit of RM251 million for 2010, according to Thomson Reuters I/B/E/S.

Zulkifli said the firm, with a market value of about US$1 billion, would maintain its current dividend payout of around 30 per cent.

The firm’s average selling prices for crude palm oil for 2010 and 2011 may hover around RM2,700-2,800 per tonne on weather concerns, Zulkifli said.

Benchmark Malaysian prices just crossed the RM3,100 level today.

Kulim is eyeing acquisitions in Malaysia to add on to its existing 38,000 hectares and the offers have been coming in, Zulkifli said.

Malaysia planters now expand through buying established estates rather than developing greenfield areas as land has run out.

“If the new estates offered to us can fit with the principles of the RSPO we are interested,” Zulkifli said, refering to the Roundtable on Sustainable Palm Oil — an industry body that sets standards for producing eco-friendly palm oil.

“We are staying away from peatlands, high conservation value areas and high gradient areas,” he said.

The firm’s unit NBPOL bought 25,000 hectares of oil palm estates in PNG for US$175 million from agribusiness giant Cargill, bringing total holdings to over 113,000 hectares this year.

Kulim and NBPOL oil palm estates have been certified under RSPO standards except for the new acquisitions from Cargill.

Kulim shares were up 2.4 per cent at 0742 GMT, outperforming the broader market which was down 0.3 per cent. — Reuters