KUALA LUMPUR (Feb 26) — Kuala Lumpur Kepong Bhd (KLK) reported a strong start to its financial year, with net profit rising sharply in the first quarter despite softer crude palm oil (CPO) prices.
For the three months ended Dec 31, 2025 (1QFY2026), the plantation and manufacturing group posted net profit of RM382.41 million — a 73.5% increase from RM220.46 million recorded a year earlier. Revenue improved 6.8% year-on-year to RM6.35 billion.
The group did not declare a dividend for the quarter.
Manufacturing Segment Returns to Profit
A key contributor to the improved results was the turnaround in KLK’s manufacturing division. The segment recorded a profit of RM42 million compared with a loss of RM53.4 million in the same period last year.
This recovery was supported by:
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Stronger earnings from the oleochemical division
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Reduced losses in non-oleochemical operations
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Improved refinery performance
While upstream plantation operations remained resilient, the downstream recovery signals improved cost management and operational efficiency.
CPO Outlook Remains Range-Bound
Looking ahead, KLK expects crude palm oil prices to trade between RM3,900 and RM4,300 per metric ton for the January–March 2026 quarter. However, management indicated that upside potential in the near term may be limited.
On the downstream front, demand conditions have shown some improvement, though margin pressure persists.
Following the completion of major capacity expansion initiatives, KLK is now prioritising earnings optimisation across its integrated operations. Backed by stable plantation performance and recovering downstream contributions, the group remains confident about delivering stronger operational results in 2026.
Batu Kawan Also Records Earnings Growth
Batu Kawan Bhd, which owns a 47.9% stake in KLK, posted similar growth momentum.
For 1QFY2026:
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Net profit rose 42.9% to RM182.36 million
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Revenue increased 6.3% to RM6.51 billion
No dividend was declared for the quarter.
KLK shares closed at RM19.18, giving it a market capitalisation of approximately RM21.41 billion, while Batu Kawan ended at RM19.60, valuing the group at RM7.83 billion.
What This Means for Industrial & Commercial Property in KL and Selangor
Although KLK operates primarily in plantation and downstream manufacturing, its performance highlights broader economic stability within Malaysia’s commodity and industrial ecosystem.
Strong corporate earnings — particularly from manufacturing and processing — often translate into:
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Sustained demand for industrial land in Selangor
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Expansion or upgrading of factory in Puchong and surrounding industrial corridors
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Increased activity within industrial property in Subang area
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Growing need for supporting commercial property in KL
Selangor remains Malaysia’s leading industrial state, with diversified sectors ranging from logistics and food processing to chemicals and advanced manufacturing. When major conglomerates report improved operational efficiency and profitability, it strengthens overall investor confidence in industrial expansion.
For stakeholders involved in office space in Bukit Jalil or industrial developments across Klang Valley, resilient corporate earnings provide a stable macro foundation. Companies with stronger balance sheets are more likely to invest in facility upgrades, automation, and regional distribution networks — all of which support long-term demand for quality industrial and commercial assets.
Broader Perspective
While commodity prices may fluctuate, operational efficiency and downstream diversification are becoming key drivers of corporate performance. This mirrors a wider trend in Malaysia’s industrial evolution — moving beyond raw production toward value-added processing and integrated supply chains.
For property investors and business owners focusing on industrial land in Selangor and strategic commercial hubs in Kuala Lumpur, the takeaway is clear:
a stable corporate earnings environment supports sustained industrial occupancy and long-term asset resilience.
As Malaysia’s economy continues to balance commodity strength with industrial upgrading, Klang Valley’s industrial and commercial property markets remain structurally supported by diversified corporate growth.
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