KUALA LUMPUR: Kuala Lumpur Kepong Bhd
(KLK) remains optimistic of delivering an improved operational performance for the financial year as plantation operations remain resilient and downstream contributions improve, said executive chairman Tan Sri Lee Oi Hian.
The plantations group posted a net profit of RM294.05mil in the second quarter of its financial year ended March 31, 2026 (2QFY26) as compared to RM154.27mil on the same quarter last year.
Earnings per share rose to 26.4 sen from 14 sen previously.
Quarterly revenue gained to RM6.55bil from RM6.34bil in the previous comparative quarter.
Year-to-date, the group's net profit rose to RM676.46mil from RM374.73mil in the year-ago period, while revenue rose to RM12.9bil from RM12.28bil on the comparative period.
The improved performance included the recognition of land sales amounting to RM126.8mil.
In its breakdown of results, the group said the plantation division's year-to-date pre-tax profit was marginally lower by 3.8% to RM993.5mil.
"The group had forward-sold a substantial portion of its Malaysian production in the derivatives market, resulting in higher mark-to-market losses on derivative contracts when CPO prices spiked.
"Performance was also affected by lower average Crude Palm Oil (CPO) selling prices, partly offset by stronger average Palm Kernel (PK) selling prices, higher CPO and PK sales volumes, and lower CPO production costs."
However, it said production levels remained healthy despite the potential disruptions amid the conflict in the Middle East.
Meanwhile, the manufacturing division recorded an improved pre-tax loss of RM394,000 in the first half as compared to a pre-tax loss of RM91.6mil in the year-ago period.
The group added that the share of losses from its associate Synthomer plc will only be reflected in the next quarter.
Meanwhile, the group will benefit from the initial recognition of equity accounting for its 24.3% associate, MP Evans Group PLC, which is anticipated to contribute positively to earnings going forward.
KLK declared an interim dividend of 20 sen per share, with entitlement date on July 10, 2026, and payable on July 28, 2026.
