KIM Loong Resources Berhad’s (KIML) quarter three financial year 2026 (3QFY26) results performance came in above TA Securities (TA) expectations, mainly supported by higher-than-expected palm oil prices.
Despite a 5.1% increase in revenue, the group recorded a 13.7% year-on-year (YoY) drop in core net profit to RM42.7 mil due to lower contributions from the milling business.
Profit margin in the second half of financial year 2026 (2HFY26) was softer, mainly impacted by weaker milling margins from lower oil extraction rate (OER), reduced crude palm oil (CPO) sales volume and increased financing costs.
For 9MFY26, the plantation division posted a profit of RM126.0 mil, marking a 20.0% YoY increase. The stronger performance was supported by a 10.3% rise in the average fresh fruits bunch (FFB) selling price to RM858/tonne, along with a 2.9% increase in FFB production to 248.3k tonnes.
The milling division recorded a profit of RM83.3 mil in 9MFY26, down 19.8% YoY. The weaker performance was mainly due to lower processing margins and higher repair and maintenance expenses.
The average CPO selling price rose 5.0% to RM4,300/tonne, partially offset 1.8% YoY decline in sales volume to 250.0k tonnes.
Management revised its FY26 FFB production growth estimate to 6-8% from earlier guidance of 5-10%, factoring in the improved age profile of young productive palms and the ongoing replanting program.
The group plans to replant approximately 300-500 ha in FY26 and expects to achieve a total processing throughput of 1.6 mil tonnes of FFB.
“Looking into 2026, we maintain a cautious outlook on the CPO prices, as ample South American soybean supplies and the resumption of US–China trade may increase soybean oil flows, thereby constraining CPO demand,” said TA.
Nevertheless, biodiesel mandate-driven demand and potential weather-related supply disruptions could serve as key catalysts for CPO price upside, helping to mitigate downside risks from trade and policy uncertainties. TA upgrades KIML to HOLD from Sell. —Dec 30, 2025
Main image: Kim Loong
