Kencana Agri Limited reported a net profit of US$11.8 million for the six months ended Jun 30 2026, up 20.6 per cent year-on-year, as stronger sales volumes of crude palm oil (CPO) and palm kernel (PK) offset higher production and procurement costs.
Earnings per share rose to 4.11 US cents from 3.41 US cents a year earlier. The board did not declare an interim dividend, saying it will “preserve cash resources to strengthen the Group’s financial position and maintain financial flexibility”.
The plantation group’s revenue grew 27.1 per cent year-on-year to US$110.8 million. CPO revenue climbed 30 per cent to US$94.3 million, reflecting a 26.2 per cent jump in sales volume to 111,408 tonnes and a 3 per cent improvement in average selling price to US$846 per tonne. PK revenue increased 12.7 per cent to US$15.9 million on higher volumes and firmer prices. Kencana, which operates a single plantation segment, lifted profit before tax 44.3 per cent to US$18.9 million.
Cost of sales expanded 33.6 per cent to US$78.7 million, mainly because of intensified field maintenance and larger purchases of third-party fresh fruit bunches (FFB) and CPO to keep its Bangka mill running at optimal rates during a replanting phase. As a result, gross profit margin narrowed to 29.0 per cent from 32.4 per cent despite the higher topline.
Finance costs fell to US$5.3 million from US$6.9 million, tracking lower borrowings, while fair-value losses on biological assets and plasma receivables eased to US$1.3 million from US$2.2 million. Income-tax expense more than doubled to US$7.1 million, reflecting the increased taxable profit and a US$2.3 million under-provision for prior years.
On the balance-sheet front, total assets stood at US$254.8 million as at Jun 30, down from US$263.6 million at end-2025 largely because of currency translation. Net debt fell, improving the net debt-to-equity ratio to 1.8 times from 2.3 times six months earlier.
Looking ahead, Kencana noted that Indonesia’s B50 biodiesel mandate should underpin domestic CPO demand. Management is monitoring evolving Indonesian export regulations, geopolitical-driven cost volatility and the potential impact of El Niño-related dry weather on FFB yields. The group will continue to focus on disciplined cost control, agronomic optimisation and measured investment in replanting and mill upgrades to bolster long-term productivity.