Chairman Lee said the company would continue to explore new approaches and opportunities to enhance efficiency and create greater long-term value for shareholders.
PETALING JAYA: Kuala Lumpur Kepong Bhd
(KLK) is optimistic about a recovery and improved stability in the company’s financial year ending Sept 30, 2026 (FY26) underpinned by the plantation division and completion of key capital-intensive projects that will boost free cash flow and pare down debt.
KLK’s positive outlook comes amid complex global dynamics and evolving trade policies, including the potential impact of ongoing US tariff negotiations on the group’s operating environment.
KLK chairman Tan Sri Lee Oi Hian said in the company’s FY25 annual report that the focus in the coming year would be to strengthen its foundations, including driving productivity, improving operational discipline and ensuring cost structures remain resilient.
The company had announced last October that AAK AB, a specialty oils and fats firm, would jointly develop a new refinery in Pasir Gudang, Johor, targeted to be operational in 2028.
It added that the joint venture would expand the company’s midstream operations, strengthen product diversification and KLK’s position as a reliable global supplier of high-value oils and fats solutions.
Lee highlighted that the company would continue to explore new approaches and opportunities to enhance efficiency and create greater long-term value for shareholders.
He also placed strong emphasis on the company’s vigilance regarding regulatory developments across its operating environments.
Lee said KLK remains proactive in its commitments towards assessing and managing any potential implications for the business.
This was primarily attributable to weak downstream performance in FY25, which materially impacted the company’s overall financial results.
Lee noted that the company’s financial performance was dampened by several non-cash losses.
“These included RM187.5mil related to our associate, Synthomer Plc, which comprised share of losses and an impairment reflecting the continued subdued demand in the chemical sector and their high gearing.”
It said while consumption remained stable, there was less demand across the oleochemical market in FY25.
In the annual report, Lee said, “The performance of the oleochemical and refinery sub-division was hampered by tight margins and startup cost of new facilities.”
Lee also made note of operations at KL-Kepong Rubber Products, part of the non-oleochemical segment, which was adversely affected due to plant reliability issues and intense competition from China.
Overall, the manufacturing division’s performance was materially weighed down by reduced profit contributions from the Oleochemical segment, coupled with higher losses in refineries.
KLK recorded a pre-tax loss of RM173.6mil for its manufacturing division.
Lee added that the company’s property division also witnessed a modest decline of 10% in pre-tax profit, reflecting slower sales in selected developments.
Notwithstanding persistent geopolitical uncertainties and global pressures, KLK delivered strong performance from its core plantation division.
Lee stated, “Our net profit attributable to shareholders recorded an increase of 38% to RM817.3mil, compared to RM591mil in FY24.”
This solid result reinforces the company’s strategic focus on strengthening operational resilience and efficiency particularly in the plantations segment.
