PETALING JAYA: Kuala Lumpur Kepong Bhd
(KLK) has posted a higher net profit of RM294.05mil for the second quarter ended March 31, 2026 versus RM154.27mil in the same quarter last year.
Its revenue for the quarter under review was also higher at RM6.55bil compared to RM6.34bil in the same quarter a year ago.
In a filing with the local bourse, the plantation company said the increase was supported by its manufacturing segment, a hike in crude palm oil (CPO) and palm kernel (PK) sales volumes, as well as lower CPO production costs.
The higher price of PK also contributed to better earnings for the group.
CPO prices had strengthened during the quarter, recovering from earlier lows of approximately RM3,900 per tonne in January to briefly peaking above RM4,800 per tonne towards end-March.
The group said this was supported by higher biodiesel blending mandates amid elevated crude oil prices.
“We expect prices to be supported above RM4,400 per tonne.”
Segmentally, its plantation segment saw its profit decline by 21.1% to RM358.5mil due to weaker CPO and PK selling prices.
The group had forward-sold a substantial portion of its Malaysian production in the derivatives market, resulting in higher mark-to-market losses on the derivative contracts when CPO prices spiked.
In addition to that, performance was also affected by lower average CPO selling prices.
“Overall, performance is expected to remain stable, supported by healthy production levels, notwithstanding the potential operational disruptions amid the conflict in the Middle East,” it said.
As for its manufacturing sector, the group saw a higher revenue of RM5.7bil but posted a loss of RM42.4mil on the back of decline in profit contribution from the oleochemical division, partially mitigated by lower losses from the refineries and non-oleochemical divisions.
However, margins across the segment remain competitive. KLK declared an interim single-tier dividend of 20 sen per share, to be paid on July 28.
The group said it will continue to remain optimistic while delivering an improved operational performance for the financial year supported by resilient plantation operations and improving downstream contributions.
It is worth noting the share of losses from its associate, Synthomer plc, will only be reflected in the next quarter, while the group will benefit from the initial recognition of equity accounting for its 24.3% associate, M.P. Evans Group PLC.
Meanwhile, the group’s parent, Batu Kawan Bhd, posted a net profit of RM164.76mil for the second quarter ended March 31, 2026 on the back of revenue at RM6.72bil.
“The group’s performance continues to be supported by the plantation segment as the key earnings driver. Despite the volatile macroeconomic conditions and geopolitical risk, the group is cautious and optimistic for the rest of financial year 2026.”
It declared an interim single tier dividend of 20 sen per share, to be paid on July 30.
