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Kuala Lumpur Kepong (KLK)

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Wednesday 23 February, 2005

Kuala Lumpur Kepong

1st Quarter Results

Kuala Lumpur Kepong Berhad
23 February 2005



                           KUALA LUMPUR KEPONG BERHAD
                                   (15043-V)
                           (Incorporated in Malaysia)

                    Condensed Consolidated Income Statement
                  For the first quarter ended 31 December 2004
                      (The figures have not been audited.)

                           Individual Quarter           Cumulative Quarter
                               -------------               --------------
                             3 months ended               3 months ended
                               31 December                  31 December
                              --------------               ---------------
                                                         
                              2004         2003            2004           2003
                         RM'000        RM'000          RM'000          RM'000

Revenue                  1,075,289      992,634       1,075,289        992,634
Operating expenses        (882,637)    (830,986)       (882,637)      (830,986)
Other operating income       6,008        5,704           6,008          5,704
                            --------      -------        --------       --------
Operating profit           198,660      167,352         198,660        167,352
Finance cost                (1,939)      (1,953)         (1,939)        (1,953)
Share of results of
associated companies         7,926        4,857           7,926          4,857
                            --------      -------        --------       --------
Profit before taxation     204,647      170,256         204,647        170,256
Tax expense                (45,840)     (41,962)        (45,840)       (41,962)
                            --------      -------        --------       --------
Profit after taxation      158,807      128,294         158,807        128,294
Minority interests          (3,478)      (7,147)         (3,478)        (7,147)
                            --------      -------        --------       --------
Net profit for the
period                     155,329      121,147         155,329        121,147
                            ========      =======        ========       ========

                               Sen          Sen             Sen            Sen

Earnings per share -
Basic                        21.88        17.06           21.88          17.06
                            ========      =======        ========       ========

- Diluted                      N/A          N/A             N/A            N/A
                            ========      =======        ========       ========

N/A - Not applicable







The Condensed Consolidated Income Statement should be read in conjunction with
the Annual Financial Report for the year ended 30 September 2004.

                           KUALA LUMPUR KEPONG BERHAD
                                   (15043-V)
                           (Incorporated in Malaysia)

                      Condensed Consolidated Balance Sheet
                             As at 31 December 2004
                      (The figures have not been audited.)
                                                  ---------         ---------
                                                31 December       30 September
                                                       2004               2004
                                                    ---------          ---------
                                                     RM'000             RM'000

Property, plant and equipment                     2,375,569          2,352,652
Land held for property development                  194,392            194,389
Associated companies                                510,939            493,443
Other investments                                   144,200             94,579
Deferred tax assets                                   4,254              5,176
Intangible assets                                    20,044             19,060
Goodwill on consolidation                            60,369             60,369
                                                    ---------          ---------
                                                  3,309,767          3,219,668
Current assets
                                                    ---------          ---------
Inventories                                         513,003            511,975
Trade and other receivables                         545,281            507,965
Property development costs                           21,171             20,489
Cash and cash equivalents                           640,202            636,264
                                                    ---------          ---------
                                                  1,719,657          1,676,693
                                                    ---------          ---------
Current liabilities
Trade and other payables                            322,422            332,023
Taxation                                             21,733             50,340
Borrowings                                          104,869            130,085
Finance leases                                          197                178
                                                    ---------          ---------
                                                    449,221            512,626
                                                    ---------          ---------
Net current assets                                1,270,436          1,164,067
                                                    ---------          ---------
                                                  4,580,203          4,383,735
                                                    =========          =========

Share capital                                       712,516            712,516
Reserves                                          3,500,478          3,322,593
                                                    ---------          ---------
                                                  4,212,994          4,035,109
Less: Cost of treasury shares                       (13,447)           (13,447)
                                                    ---------          ---------
Shareholders' equity                              4,199,547          4,021,662
Minority interests                                  144,250            137,894
Long term and deferred liabilities
                                                    ---------          ---------
Deferred tax liabilities                            165,395            158,662
Provision for retirement benefits                    42,247             40,456
Borrowings                                           28,588             24,849
Finance leases                                          176                212
                                                    ---------          ---------
                                                    236,406            224,179
                                                    ---------          ---------
                                                  4,580,203          4,383,735
                                                    =========          =========

Net tangible assets per share (RM)                      5.80              5.55



The Condensed Consolidated Balance Sheet should be read in conjunction with the
Annual Financial Report for the year ended 30 September 2004.

                           KUALA LUMPUR KEPONG BERHAD
                                   (15043-V)
                           (Incorporated in Malaysia)

             Condensed Consolidated Statement of Changes in Equity
                  For the first quarter ended 31 December 2004
                      (The figures have not been audited.)


                                                     Capital     Exchange
              Share       Capital  Revaluation    redemption  fluctuation  General    Revenue   Treasury
            capital       reserve      reserve       reserve     reserve   reserve    reserve     shares       Total
            -------       -------       -------      -------     -------   -------    -------     ------     -------
             RM'000       RM'000        RM'000        RM'000      RM'000    RM'000     RM'000     RM'000      RM'000

At 1        712,516     1,195,172       49,745        14,867    96,357    14,337     1,952,115    (13,447)  4,021,662
October     
2004

Net gain          -            -             -             -     22,500         -            56          -      22,556
not
recognised   
in the income
statement       

Net profit        -            -             -             -          -         -       155,329          -     155,329
for              
the period       

Transfer          -       (1,263)            -             -          -         -         1,263           -          -
from
capital
reserve to
revenue           
reserve         

At 31       -------       -------      -------       -------    -------   -------       -------      ------    -------
December    712,516    1,193,909        49,745        14,867    118,857    14,337     2,108,763     (13,447)  4,199,547
2004        =======       =======      =======       =======    =======   =======       =======      ======     =======

At 1
October     712,516    1,158,255        49,745        11,735     97,626    14,337     1,745,064     (13,447)  3,775,831
2003

Net               -          (7)             -             -     28,374         -             -           -      28,367
(loss)/
gain not
recognised       
in the
income
statement

Net profit        -            -             -             -           -        -       121,147           -     121,147
for               
the period

Transfer          -        2,154             -             -           -        -       (2,154)           -           -
from
revenue
reserve to
capital      
reserve            
             -------     -------       -------       -------     -------  -------       -------      ------     -------
At 31
December     
2003         712,516   1,160,402        49,745        11,735     126,000   14,337     1,864,057     (13,447)  3,925,345 
             =======     =======       =======       =======     =======  =======       =======      ======     =======





The Condensed Consolidated Statement of Changes in Equity should be read in
conjunction with the Annual Financial Report for the year ended 30 September
2004.


                           KUALA LUMPUR KEPONG BERHAD
                                   (15043-V)
                           (Incorporated in Malaysia)

                   Condensed Consolidated Cash Flow Statement
                  For the first quarter ended 31 December 2004
                      (The figures have not been audited.)
                                                         ----------------
                                                         3 months ended
                                                          31 December
                                                         ----------------
                                                              
                                                      2004                2003
                                                   ---------           ---------
                                                    RM'000              RM'000
Cash Flows from Operating Activities
Profit before taxation                             204,647             170,256
Adjustment for non-cash flow :-
Non-cash items                                      19,214              19,507
Non-operating items                                 (3,116)             (2,948)
                                                   ---------           ---------
Operating profit before working capital changes    220,745             186,815
Working capital changes :-
Net change in current assets                       (70,806)                795
Net change in current liabilities                   (9,528)             14,108
                                                   ---------           ---------
Cash generated from operations                     140,411             201,718
Interest paid                                       (2,012)             (1,953)
Tax paid                                           (28,831)            (25,094)
Retirement benefit paid                               (290)             (1,214)
                                                   ---------           ---------
Net cash generated from operating activities       109,278             173,457
                                                   =========           =========

Cash Flow from Investing Activities
Equity investments                                 (34,290)             12,176
Other investments                                  (43,023)            (37,716)
                                                   ---------           ---------
Net cash used in investing activities              (77,313)            (25,540)
                                                   =========           =========

Cash Flow from Financing Activities
Bank borrowings                                    (11,394)            (39,855)
Dividends paid to minority shareholders                  -                (787)
Issue of shares to minority shareholder              2,982                   -
                                                   ---------           ---------
Net cash used in financing activities               (8,412)            (40,642)
                                                   =========           =========

Net increase in cash and cash equivalents           23,553             107,275
Cash and cash equivalents at 1 October             611,261             581,962
                                                   ---------           ---------
                                                   634,814             689,237
Foreign exchange difference on opening balance      (4,449)             (3,787)
                                                   ---------           ---------
Cash and cash equivalents at 31 December           630,365             685,450
                                                   =========           =========




The Condensed Consolidated Cash Flow Statement should be read in conjunction
with the Annual Financial Report for the year ended 30 September 2004.

                           KUALA LUMPUR KEPONG BERHAD
                                   (15043-V)
                           (Incorporated in Malaysia)

                       Notes to Interim Financial Report

A     Explanatory Notes as required by MASB 26

A1.   Accounting Policies
      The interim financial report is unaudited and has been prepared in
      compliance with Malaysian Accounting Standards Board ('MASB') 26 - Interim
      Financial Reporting.

  The accounting policies and methods of computation adopted by the Group in
  this interim financial report are consistent with those adopted in the
  financial statements for the year ended 30 September 2004.

A2.   Audit Report
      The audit report for the financial year ended 30 September 2004 was not
      subject to any qualifications.
A3.   Seasonal and Cyclical Factors
      The Group's plantation operations are affected by seasonal crop
      production, weather conditions and fluctuating commodity prices. The
      business of its retailing sector is subject to seasonal sales.
A4.   Unusual Items
      There were no items affecting the assets, liabilities, equity, net income,
      or cash flows that are unusual because of their nature, size, or
      incidence.

A5.   Changes in Estimates
      There were no significant changes in the amount of estimates reported in
      prior interim periods or prior financial years that have a material effect
      in the current interim period.

A6.   Issuance or Repayment of Debts and Equity Securities
      There were no issuance and repayment of debts and equity securities, share
      buy-backs, share cancellation, shares held as treasury shares or resale of
      treasury shares for the current financial year to-date.

A7.   Dividends Paid
      There were no dividend paid during the financial quarter ended 31 December
      2004 (31 December 2003 : Nil).

A8.   Segment Information
      Segment information is presented in respect of the Group's business
      segments.
      Inter-segment pricing is determined based on current market prices.






                                      3 months ended 31 December
                                      ----------------------------
                                                     ---     --------------
                                  Revenue                  Profit before tax
                               ---------------               --------------
                                     ---                   ------- ---  --------
                              2004            2003          2004          2003
                          RM'000          RM'000         RM'000        RM'000

Plantation                 431,003         369,923       120,422        82,704
Manufacturing              366,706         337,949        22,765        25,483
Retailing                  296,076         274,579        49,195        48,421
Property development         3,530          12,678           536         3,301
Investment holding          20,545          24,364         5,055         4,900
Others                       9,338           9,088         1,403         3,745
                            --------        --------       -------      --------
                         1,127,198       1,028,581       199,376       168,554
Inter-segment              (51,909)        (35,947)            -             -
elimination                 --------        --------       -------      --------
                         1,075,289         992,634       199,376       168,554
                            ========        ========
Corporate                                                   (716)       (1,202)
                                                           -------      --------
                                                         198,660       167,352
Finance cost                                              (1,939)       (1,953)
Share of results of
associated companies                                       7,926         4,857
                                                           -------      --------
                                                         204,647       170,256
                                                           =======      ========

A9.   Valuations of Property, Plant and Equipment
      The valuations of land and plantation development have been brought
      forward without amendment from the previous financial statement.

A10.   Events Subsequent to Balance Sheet Date
       In the interval between the end of the reporting period and the date of
       this report, no material events have arisen which have not been reflected
       in the interim financial statements.

A11.   Changes in the Composition of the Group
       (a) Kepong Plantations Berhad (In Members' Voluntary Winding-Up), a
           wholly-owned subsidiary of the Company was dissolved pursuant to
           Section 272(5) of the Companies Act, 1965 and ceased to be a
           subsidiary of the Company on 16 December 2004.

       (b) Demuth Limited and Personality Beauty Products Limited, both inactive
           wholly-owned subsidiaries of Standard Soap Company Limited ('Standard
           Soap') were dissolved pursuant to Section 652A of the United Kingdom
           Companies Act, 1985 and ceased to be subsidiaries of Standard Soap on
           28 December 2004. Standard Soap is a wholly-owned subsidiary of the
           Company.

A12.   Changes in Contingent Liabilities and Contingent Assets
       There were no contingent liabilities or contingent assets since the last
       annual balance sheet date.

B     Explanatory Notes as required by the BMSB Revised Listing Requirements
      ------------------------------------------------------------------------

B1.   Review of Performance
      For the 1st quarter under review, the Group recorded a profit before
      taxation of RM204.6 million, an improvement of 20.2% over that of the
      preceding year's same quarter largely due to increased contribution from
      the plantation sector which recorded a higher turnover. The other sectors
      of the Group reported marginal changes in their results.


B2.   Variation of Results to Preceding Quarter
      The Group's pre-tax profit for the current quarter under review increased
      34.1% to RM204.6 million when compared to the previous quarter's profit.
      Earnings from retailing had improved owing to seasonal sales and the
      manufacturing sector had also recorded better profit performance for the
      current quarter.

B3   Current Year Prospects
     With the weaker palm oil prices, the Directors are of the opinion that the
     profit before tax would be lower for the current financial year, despite
     the expected higher FFB production and the anticipated increase in earnings
     from the manufacturing sector.

B4.   Profit Forecast and Profit Guarantee
      The Group did not issue any profit forecast or profit guarantee during the
      current financial year to-date.
B5.   Tax Expense
                                   Individual Quarter      Cumulative Quarter
                                       ------------            ------------
                                     3 months ended          3 months ended
                                       31 December             31 December
                                       -------------           -------------
                                            ---             ------- ---  -------
                                     2004         2003       2004         2003
                                   RM'000       RM'000     RM'000       RM'000
      Current tax expense
      Malaysian taxation           27,880       19,625     27,880       19,625
      Overseas taxation             7,972       10,137      7,972       10,137
                                     ------       ------     ------       ------
                                   35,852       29,762     35,852       29,762
      Deferred tax relating to
      origination of temporary
      differences                   7,767        9,734      7,767        9,734
                                     ------       ------     ------       ------
                                   43,619       39,496     43,619       39,496
      (Over)/Under provision in
      respect of previous year       ------       ------     ------       ------
      Malaysian taxation             (136)       1,434       (136)       1,434
      Overseas taxation               178            -        178            -
                                     ------       ------     ------       ------
                                       42        1,434         42        1,434
                                     ------       ------     ------       ------
                                   43,661       40,930     43,661       40,930
      Share of associated           2,179        1,032      2,179        1,032
      companies' taxation            ------       ------     ------       ------
                                   45,840       41,962     45,840       41,962
                                     ======       ======     ======       ======

  The effective tax rates for the current quarter and year to-date are lower
  than the statutory tax rate due principally to availability of tax incentives
  and utilisation of previously unrecognised tax losses.

B6.   Sale of Unquoted Investments and Properties
      (a) There was no sale of unquoted investments during the financial quarter
          ended 31 December 2004 (31 December 2003 : Nil).

(b)   Sale of properties             Individual Quarter     Cumulative Quarter
                                         ------------           ------------
                                        -------------          -------------
                                       3 months ended         3 months ended
                                        31 December            31 December
                                        -------------          -------------
                                       2004        2003       2004        2003
                                     RM'000     RM'000      RM'000     RM'000
                                     =======     ======     =======     ======
                                      =======      ======    =======      ======
      Surplus arising from            1,259           -      1,259           -
      government
      acquisitions of land
                                      =======      ======    =======      ======

B7.   Quoted Securities
      (a) Purchases and sales of quoted securities other than securities in
          existing subsidiaries for the current quarter and financial year
          to-date :-
                                   Individual Quarter      Cumulative Quarter
                                       ------------            ------------
                                     3 months ended          3 months ended
                                       31 December             31 December
                                       -------------           -------------
                                            ---             ------- ---  -------
                                     2004         2003       2004         2003
                                   RM'000       RM'000     RM'000       RM'000

          Purchases of quoted      59,259        9,992     59,259        9,992
          securities                 ======       ======     ======       ======

          Sales proceeds of quoted  7,562       10,162      7,562       10,162
          securities                 ======       ======     ======       ======

          (Loss)/Surplus on sales  (2,522)       2,154     (2,522)       2,154
          of quoted securities       ======       ======     ======       ======

  (b) Investments in quoted securities other than securities in existing
      subsidiaries as at end of the reporting period were as follows :-
                                                 ---------          ---------
                                               31 December     30 September 2004
                                                      2004
                                                   ---------             ---------
                                                 RM'000             RM'000
      At cost
      Associated companies                         156,322               156,322
      Other investments                            140,243                90,926
                                                   ---------             ---------
                                                   296,565               247,248
                                                   =========             =========
      At carrying value less
      allowance
      Associated companies                         400,031               383,762
      Other investments                            138,872                89,555
                                                   ---------             ---------
                                                   538,903               473,317
                                                   =========             =========
      At market value
      Associated companies                         664,877               559,873
      Other investments                            181,017               115,748
                                                   ---------             ---------
                                                   845,894               675,621
                                                   =========             =========

B8.   Status of Corporate Proposals Announced
      There were no corporate proposals announced but not completed at the date
      of this report.

B9.   Group Borrowings
      As at the end of the reporting period, the Group's borrowings were as
      follows :-

                               31 December 2004                            30 September 2004
                                 ---------------                             --------------
                             ---                                 ------- ---          ---------
                                 Amount in Foreign Currency                  Amount in Foreign Currency
                                          ---------                                   ---------
                    RM'000                             '000     RM'000                             '000
(a) Repayable
    within 12
    months :-
    (i) Term
        Loans
        - Secured   55,431       GBP7,580                       56,379       GBP8,244
                     1,780       CAD565                          1,689       CAD565
                     5,272       HKD10,800                       5,204       HKD10,688
                       296       AUD100                          4,767       AUD1,750
                    --------                                     -------
                    62,779                                      68,039
        -           18,453       Rmb40,203                      23,043       Rmb50,203
        Unsecured   --------                                     -------
                    81,232                                      91,082
                    ========                                     =======

                            31 December 2004                            30 September 2004
                             ---------------                               --------------
                           
                              Amount in Foreign Currency                   Amount in Foreign Currency
                                        --------                                   -----------
                RM'000                              '000     RM'000                              '000
(ii)  Bank
      Overdraft
      - Secured     5,104           USD1,344                  12,317             USD3,243
                        -                                      4,999             GBP731
                        -                                      4,794             CAD1,602
                   --------                                    -------
                    5,104                                     22,110
      -             4,698           GBP643                     2,893             GBP423
      Unsecured
                       35                                          -
                   --------                                    -------
                    9,837                                     25,003
                   ========                                    =======

(iii) Short Term
      Borrowing
      -            13,800                                     14,000
      Unsecured    ========                                    =======

Total
repayable
within 12
months            104,869                                    130,085
                   ========                                    =======

(b)   Repayable after 12 months :-
      Term Loans
      - Secured                        2,254   CAD716        1,580   CAD526
                                       8,042   GBP1,100     10,689   GBP1,564
                                           -                 1,183   HKD2,433
                                       -------               -------
                                      10,296                13,452
                                       =======               =======

- Unsecured                        18,292     USD4,815        11,397     USD3,000
                                    =======                    =======

Total repayable after 12
months                             28,588                     24,849
                                    =======                    =======

B10.   Financial Instruments with Off Balance Sheet Risk
       The forward exchange contracts entered into by the Group as at 17
       February 2005 (being a date not earlier than 7 days from the date of this
       report) were as follows :-
                 -------    -------    ---------          ---------                  --------
                Currency   Contract   Equivalent   Mature within One Year   Mature in the Second Year
                            Amount      Amount
                   -------  -------    ---------                  ---------                    --------
                           Million    RM million         RM million                RM million

(a) Sale          GBP          12.1         85.5                     85.5                           -
    contracts
                  AUD           0.8          2.2                      2.2                           -
                  NZD           0.7          1.9                      1.9                           -
                  EURO          2.1         10.6                     10.6                           -
                  USD         284.7      1,081.4                  1,043.7                        37.7
                              =======    =========                =========                    ========

(b) Purchase      EURO          1.0          5.0                      5.0                           -
    contracts
                  USD           3.2         12.8                     12.6                         0.2
                  GBP           4.3         29.9                     27.2                         2.7
                              =======    =========                =========                    ========



  The contracts were entered into by the Group as hedges for committed sales and
  purchases denominated in foreign currencies. The hedging of the foreign
  currencies is to minimise the exposure of the Group to fluctuations in foreign
  exchange on receipts and payments.
  The transactions in foreign currencies which are hedged by forward foreign
  exchange contracts are recorded in the book at the contracted rates. Any gains
  or losses arising from forward contracts are recognised in the Income
  Statement upon maturity.
  There is minimal credit risk for the forward foreign exchange contracts
  because these contracts are entered into with licensed financial
  institutions.

B11.   Material Litigation
       On 14 December 2004, Ablington Holdings Sdn Bhd ('AHSB'), a wholly-owned
       subsidiary of KL-Kepong Equity Holdings Sdn Bhd which in turn is
       wholly-owned by the Company, had acquired 35,000,000 ordinary shares of
       RM1.00 each in Ladang Perbadanan-Fima Berhad ('LPF'), representing
       approximately 30.6% equity interest therein, for a total consideration of
       RM99,750,000 or RM2.85 per share ('the Acquisition'). The Acquisition was
       effected as a direct business transaction in accordance with the rules
       and regulations of Bursa Malaysia Securities Berhad.
       The Company had earlier announced on 29 October 2004 that AHSB acquired
       17,600,000 LPF shares, representing approximately 15.4% of the issued and
       paid-up share capital of LPF. This, together with the Acquisition,
       resulted in AHSB holding a total of 52,600,000 LPF shares, representing
       approximately 46.0% of the issued and paid-up share capital of LPF. In
       consequence thereof, pursuant to Section 33B(2) of The Securities
       Commission Act, 1993 and Part II of the Malaysian Code on Take-Overs and
       Mergers, 1998, AHSB was obliged to extend a conditional mandatory offer
       to the shareholders of LPF for the remaining 61,700,000 LPF shares not
       already owned by AHSB ('the MGO').
       On 16 December 2004, Glamour Green Sdn Bhd ('GGSB') obtained an ex-parte
       interim injunction against the Company and AHSB restraining Ambank
       Berhad, the Company and AHSB from dealing with the 35,000,000 LPF shares
       which AHSB acquired on 14 December 2004, and AHSB from continuing with
       the MGO.

  On 22 December 2004, the Company and AHSB obtained an interim order from the
  High Court of Malaya (the 'Court') at Kuala Lumpur for the preservation of
  assets in LPF.
  The Court has fixed GGSB's application for injunction and KLK/AHSB's
  application for the preservation of assets in LPF, for mention on 4 March 2005
  whereby the Court will then give further instructions on how the applications
  should proceed and thereafter fix a date for hearing.

B12.   Dividend
       (a) The Directors do not recommend the payment of dividend for the first
           quarter ended 31 December 2004 (31 December 2003 : Nil).

  (b) The total dividend for the current financial year is Nil (2003 : Nil) per
      share less 28% Malaysian income tax.

B13.   Earnings Per Share
       Basic earnings per share
       The earnings per share is calculated by dividing the net profit for the
       period by the weighted average number of shares of the Company in issue
       during the period.

                       Individual Quarter             Cumulative Quarter
                          ---------------                --------------
                         3 months ended                 3 months ended
                           31 December                    31 December
                         ----------------                ---------------
                                                      -------- ---      --------
                          2004          2003            2004              2003

(a) Net profit for     155,329       121,147         155,329           121,147
    the period          ========      ========        ========          ========
    (RM'000)

(b) Weighted       709,977,128   709,977,128     709,977,128       709,977,128
    average number      ========      ========        ========          ========
    of shares
  (c)    Earnings per share (sen)    21.88       17.06      21.88       17.06
                                     =======    ========    =======    ========

By Order of the Board
J. C. LIM
FAN CHEE KUM
Company Secretaries

23 February 2005





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