Batu Kawan Bhd slipped into the red for the first nine months of FY26 (9M26), posting a net loss of RM306.04 million compared to a net profit of RM398.4 million a year earlier, dragged by a hefty impairment on Kuala Lumpur Kepong Bhd’s investment in Synthomer plc.
Revenue for 9M26 nevertheless rose 6.4% to RM20.47 billion from RM19.24 billion, supported by higher sales volumes and lower production costs.
The weaker bottom line was largely driven by the third quarter, when Batu Kawan recorded a net loss of RM653.16 million against a net profit of RM182.92 million a year earlier. The loss stemmed mainly from a RM1.62 billion impairment on subsidiary KLK’s investment in UK-listed associate Synthomer.
Quarterly revenue, however, increased 9.7% to RM7.24 billion from RM6.60 billion, supported by improved contributions from the plantation and manufacturing segments.
Batu Kawan stressed that the impairment was accounting in nature and would not affect the group’s operating cash flow, liquidity, debt-servicing capability or dividend-paying capacity.
Looking ahead, the group expects its plantation business to remain its key earnings driver, supported by healthy production and favourable palm product prices, although operating costs are expected to stay elevated.
Its oleochemical division is also expected to benefit from improving market conditions, while refinery and kernel-crushing operations could remain pressured by industry overcapacity and tighter margins.
Despite macroeconomic volatility and geopolitical uncertainties, Batu Kawan remains cautiously optimistic about delivering a favourable performance for the remainder of the financial year.
