Indonesian Palm Oil News (IPO News) — Kuala Lumpur Kepong Berhad (KLK), one of Malaysia’s major palm oil groups, recorded a net loss attributable to owners of the parent of RM1.34 billion in the third quarter of financial year 2026, ended June 30, 2026. This compared with a net profit of RM346.59 million in the corresponding quarter a year earlier.

Despite the loss, KLK’s revenue increased by 9.7% to RM7.05 billion from RM6.43 billion in the same quarter last year. The reported loss was primarily driven by a RM1.62 billion impairment on KLK’s investment in Synthomer plc, an associate listed on the London Stock Exchange.

Investment Impairment Drives Reported Loss

In a statement issued on August 24, 2026, KLK explained that the impairment of its investment in Synthomer was a one-off accounting adjustment that was non-cash and non-operational in nature. The company said the measure was intended to reduce uncertainty affecting its profit-and-loss statement in future periods.

KLK stated that the adjustment was not expected to affect its cash flow or dividend prospects. Following the impairment, the carrying value of KLK’s investment in Synthomer was reduced to approximately RM190 million.

KLK also reported that, excluding the impairment and its share of Synthomer’s losses, the group’s profit after tax and non-controlling interests for the third quarter would have been RM444.8 million, compared with RM347.1 million in the corresponding period last year.

Nine-Month Financial Performance

For the first nine months of FY2026, KLK’s revenue reached RM19.95 billion, an increase of 6.6% from RM18.71 billion in the same period a year earlier. However, the group recorded a net loss attributable to owners of the parent of RM667.97 million, reversing from a net profit of RM721.32 million in the first nine months of FY2025.

KLK explained that higher sales volumes and lower crude palm oil (CPO) production costs helped offset the impact of less favourable CPO selling prices. Excluding the Synthomer impairment and KLK’s share of the associate’s losses, the group’s profit after tax and non-controlling interests for the nine-month period increased by 43% to RM1.12 billion from RM785.1 million a year earlier.

Plantation and Manufacturing Support Operating Performance

In the plantation segment, KLK’s cumulative profit before tax remained relatively stable at RM1.65 billion. Higher sales volumes and lower CPO production costs supported performance, helping to mitigate pressure from selling prices.

Meanwhile, the manufacturing segment improved. Its cumulative profit before tax reached RM100.2 million, compared with a loss before tax of RM64.6 million in the corresponding period last year. The improvement was mainly driven by stronger contributions from the oleochemicals business and reduced losses in non-oleochemical manufacturing.

KLK expects its plantation segment to remain supported by strong production levels and favourable palm product prices. However, the refining and palm kernel processing businesses continue to face challenges from industry overcapacity and margin pressure.

KLK’s third quarter FY2026 results show that the reported loss was primarily influenced by the Synthomer investment impairment. Meanwhile, group revenue continued to grow, while its plantation and manufacturing operations demonstrated relatively stable or improving performance.

Muslim M. Amin, Editor in Chief

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