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 higher crude palm oil (CPO) sales volume and a firmer average selling price offset softer plantation yields.
Revenue climbed 27.1 per cent to US$110.8 million. The company did not declare any dividends for the period.
Segment performance showed CPO sales rising 30.0 per cent year-on-year to US$94.3 million on the back of a 26.2 per cent increase in shipment volume to 111,408 tonnes and a 3.0 per cent improvement in average selling price to US$846 per tonne. Sales of other products, including palm kernel and fresh fruit bunches (FFB), added US$16.5 million, up 13.2 per cent. The stronger revenue contributed to a 13.7 per cent rise in gross profit to US$32.1 million, although gross margin narrowed to 29.0 per cent from 32.4 per cent as the group processed a higher proportion of third-party FFB.
Operationally, FFB processed grew 3.4 per cent to 463,104 tonnes, supported by a 55.4 per cent spike in external crop intake that compensated for a 5.0 per cent decline in nucleus output. The oil extraction rate improved to 21.4 per cent from 21.0 per cent, lifting CPO production by 5.6 per cent to 99,201 tonnes. Nucleus FFB yield slipped 2.9 per cent to 6.6 tonnes per hectare due to a higher proportion of young and ageing plantations.
On the cost side, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 10.5 per cent to US$33.1 million, but the EBITDA margin narrowed to 29.9 per cent from 34.4 per cent. Rising third-party fruit purchases and continued replanting expenses weighed on profitability.
The balance sheet strengthened over the half-year. Net debt fell, bringing the net debt-to-equity ratio down to 1.8 times from 2.3 times as at end-2025, while net debt-to-EBITDA improved to 1.7 times from 2.3 times. Cash and cash equivalents stood at US$16.7 million, 11.9 per cent higher than a year earlier, after operating activities generated US$24.5 million in cash which largely funded US$6.8 million in capital expenditure and US$16.9 million in debt repayments.
Kencana Agri ended June with 67,862 hectares of planted area across Sumatra, Kalimantan and Sulawesi, of which 64 per cent is in the prime and old mature categories. The group operates seven palm oil mills with combined capacity of 335 tonnes an hour and two kernel-crushing plants capable of processing 435 tonnes a day.
The company did not issue quantitative guidance but indicated that ongoing replanting and continued engagement with smallholders under its plasma scheme are expected to underpin long-term productivity while the improved leverage profile provides greater financial flexibility.