Kuala Lumpur Kepong Bhd (KLK) has recognised a one-off RM1.62 billion non-cash impairment on its equity carrying cost in associate company Synthomer plc, a move the group said would remove a recurring and uncertain drag on future earnings.
KLK said the accounting adjustment was non-cash and non-operational, with no expected impact on the group’s cash flow or dividend outlook.
The impairment contributed to KLK reporting a loss after tax and minority interest (LATAMI) of RM668.0 million for the nine months ended June 30, 2026 (9M FY26), compared with a profit after tax and minority interest (PATAMI) of RM721.3 million in the corresponding period last year.
However, excluding the one-off Synthomer impairment and KLK’s share of losses from the associate, the group would have recorded a 43% improvement in PATAMI to RM1.12 billion, from RM785.1 million a year earlier.
For the third quarter ended June 30, 2026, KLK reported a LATAMI of RM1.34 billion, compared with PATAMI of RM346.6 million in Q3 FY25.
Excluding the one-off impairment and Synthomer’s share of losses, KLK would have remained profitable, recording PATAMI of RM444.8 million, up from RM347.1 million in the corresponding quarter last year.
The group similarly reported a loss before tax (PBT) of RM121.9 million for 9M FY26, compared with a profit before tax of RM1.22 billion in the same period a year earlier.
On an underlying basis, excluding Synthomer’s impact, KLK said PBT would have increased 30% to RM1.67 billion, from RM1.28 billion previously.
For Q3 FY26, PBT stood at RM659.7 million, compared with RM525.4 million in Q3 FY25.
The quarterly performance was supported primarily by contributions from KLK’s Plantation and Manufacturing segments.
The impairment of Synthomer reflects a significant accounting adjustment to KLK’s investment in the associate, but does not represent a corresponding cash outflow.
KLK said the move would decisively remove the recurring and uncertain earnings drag associated with Synthomer from the group’s future financial performance.
With the impairment being non-cash and non-operational, the group expects its cash flow and dividend outlook to remain unaffected.
The underlying figures suggest that KLK’s core businesses continued to generate positive earnings despite the reported statutory loss arising from the one-off impairment and its associate’s losses.
KLK Chief Operating Officer Lee Jia Zhang said “To remove the overhang that distorts the Group’s continued strong fundamental performance, it is important that we provide certainty and clarity to our stakeholders by the decisive move to impair Synthomer. Moving forward, while we continue to equity account, our carrying cost is significantly marked down to RM190 million.”
