Plantation giant Kuala Lumpur Kepong Bhd (KLK) and its parent company Batu Kawan Bhd reported a sharp rise in second-quarter earnings for the period ended March 31, 2026, supported mainly by land disposal gains and foreign exchange movements.
Both companies announced interim dividends of 20 sen per share, with KLK’s payout scheduled for July 28 and Batu Kawan’s on July 30, reflecting improved near-term profitability.
KLK posted a 90.61% jump in net profit to RM294.05 million in 2QFY2026, compared with RM154.27 million in the same period last year, while revenue rose modestly by 3.35% to RM6.55 billion.
A major contributor to earnings was a RM126.3 million gain from land sales and government land acquisitions, significantly higher than RM3.9 million recorded in the previous year. The group also benefited from a RM73.75 million foreign exchange gain, reversing a loss in the corresponding quarter last year.
For the first half of FY2026, KLK’s net profit surged 80.25% to RM676.46 million, while revenue increased 5.01% to RM12.9 billion, reflecting overall steady operational performance alongside one-off boosts.
Its parent company, Batu Kawan, also recorded strong growth, with 2QFY2026 net profit rising 87.48% to RM164.76 million. The improvement was largely driven by a RM126.85 million gain from land sales and the absence of previous equity losses from its UK-listed associate Synthomer plc.
KLK holds a 47.9% stake in Batu Kawan, making its performance closely linked to the plantation group’s operational and non-operational gains.
Despite the strong headline figures, KLK’s core plantation operations saw a 21.1% decline in profit to RM358.5 million, pressured by weaker average crude palm oil (CPO) prices and palm kernel prices, as well as fair value losses from derivative contracts.
Average realised CPO prices fell 10.4% to RM3,688 per tonne, while palm kernel prices dipped 2.5% to RM3,183 per tonne. These factors weighed on core earnings despite stable production.
The group’s manufacturing segment also recorded widening losses due to weaker oleochemical performance, although revenue improved. Meanwhile, its property development division saw a significant profit decline as both revenue and margins softened.
KLK noted that its investment holding segment performed better, mainly due to improved farming contributions and the absence of prior-year losses from Synthomer.
Looking ahead, KLK expects crude palm oil prices to remain supported above RM4,400 per metric tonne, driven by biodiesel blending mandates and stronger crude oil prices. Prices have already shown volatility, strengthening from around RM3,900 per tonne in January to above RM4,800 by late March.
The group remains cautiously optimistic that improved downstream contributions and resilient plantation operations will support better full-year performance.
Yao Mu Realty, based in Kuala Lumpur, Malaysia, specializes in industrial real estate for factories and land, delivering professional and efficient solutions.
Posted by Yao Mu Realty Sdn Bhd on 19 May 26
Malaysia