KLK and parent Batu Kawan plan 20 sen dividends each as profit surges on land disposals, forex gains

KUALA LUMPUR (May 19): Plantation group Kuala Lumpur Kepong Bhd (KL:KLK) and its parent company Batu Kawan Bhd (KL:BKAWAN) reported strong second-quarter results on Monday, with net profits surging around 90%, lifted by gains from land disposals and favourable foreign exchange gains.

Both companies declared interim dividends of 20 sen per share for the quarter, which ended March 31, 2026 (2QFY2026). KLK's dividend is payable on July 28, while Batu Kawan's payout will be on July 30.

KLK's 2QFY2026 net profit surged 90.61% to RM294.05 million, from RM154.27 million in 2QFY2025, while revenue rose 3.35% to RM6.55 billion from RM6.34 billion.

Notably, it booked a surplus of RM126.3 million from land sales and government land acquisitions — a sharp increase from RM3.9 million from the year before. It also recognised a foreign exchange gain of RM73.75 million, reversing a foreign exchange loss of RM69.38 million in the previous corresponding quarter.

For the first six months of FY2026, KLK's net profit jumped 80.25% to RM676.46 million from RM374.73 million, while revenue grew 5.01% to RM12.9 billion from RM12.28 billion.

Similarly, Batu Kawan, which holds a 47.9% in KLK, saw its 2QFY2026 earnings boosted by a one-off gain of RM126.85 million from land sales, as well as the absence of equity-accounted losses from its UK-listed chemical associate, Synthomer plc, which dented its performance last year.

Batu Kawan made a net profit of RM164.76 million for its 2QFY2026, up 87.48% from RM87.89 million in 2QFY2025, while revenue rose 3.19% to RM6.72 billion from RM6.51 billion. For the 6MFY2026, Batu Kawan’s net profit climbed 61.1% to RM347.13 million from RM215.48 million, while revenue climbed 4.71% to RM13.23 billion from RM12.63 billion.

KLK's core operations face headwinds

Setting aside the one-off gains, KLK's core plantation business recorded a 21.1% drop in profit to RM358.5 million in 2QFY2026, from RM454.26 million in 2QFY2025. The weaker earnings were due to a 10.4% drop in average realised crude palm oil (CPO) prices to RM3,688 per tonne, a 2.5% slip in palm kernel prices to RM3,183 per tonne, and a RM121 million fair value loss on derivative contracts.

Its manufacturing business also saw losses widening to RM42.4 million from RM38.3 million due to weaker contributions from the oleochemical division. This was despite a 5.2% revenue gain to RM5.7 billion from RM5.42 billion. Also down was its property development profit, dropping 47.2% to RM1.9 million from RM3.5 million, as revenue fell to RM25.7 million from RM39.7 million. Investment holding, however, saw significantly lower loss of RM19.4 million as opposed to RM94.8 million previously, on stronger performance from its farming sector and the absence of Synthomer's equity loss, which amounted to RM63.3 million previously.

On prospects, KLK said CPO prices are expected to remain supported above RM4,400 per MT, underpinned by higher biodiesel blending mandates and elevated crude oil prices. CPO prices had strengthened from RM3,900 per MT in January this year, to above RM4,800 per MT towards end-March, it noted.

The group remains optimistic of delivering an improved operational performance for the financial year, supported by resilient plantation operations and improving downstream contributions. 

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