PETALING JAYA: Kawan Renergy Bhd
recorded higher revenue in the third quarter ended July 31, 2026 (3QFY26), driven by growth across all four of its main business segments, although earnings were weighed by lower margins and higher costs.
Kawan Renergy's net profit for 3QFY26 fell to RM2.04mil from RM7.49mil a year earlier.
Revenue however rose 32.6% to RM46.5mil from RM35.1mil in 3QFY25.
The group said the higher revenue was supported by increased recognition from its industrial process equipment business.
It also commenced a data centre project during the quarter, although the project remains at a preliminary stage.
For the cumulative nine-month period (9MFY26), net profit fell to RM8.6mil from RM17.3mil in 9MFY25.
Revenue rose 43.4% y-o-y to RM136.7mil from RM95.3mil in 9MFY25.
The decline in net earnings was mainly due to weaker gross profit margins and higher administrative expenses.
Net profit margin fell to 6.3% in 9MFY26 from 18.2% a year earlier.
Kawan Renergy said margins were affected by cost overruns on a Sabah power plant project, higher transportation, labour and material costs amid Middle East tensions, and additional sales and service tax (SST) costs following the tax’s expanded scope from September 2025.
“Our 3QFY26 results reflect the continued cost pressures we flagged in the earlier quarters, which were due to geopolitical tensions that led to higher crude oil prices.
“The Sabah power plant cost overruns eased during the quarter, though their earlier cumulative impact weighed on our year-on-year performance.
“Meanwhile, our group order book stands at RM92.4mil, underpinning the outlook for the coming quarters,” Kawan Renergy noted in a statement.
Looking ahead, management remains cautious amid continued uncertainty surrounding the Middle East conflict and elevated oil prices.
It added that cost pressures are expected to remain until the effect of lower oil prices filters through global supply chains.
