KUALA LUMPUR (Aug 28): Hengyuan Refining Company Bhd (KL:HENGYUAN) resumed dividend payments after four years as its quarterly net profit surged to its highest level since 2022, driven by higher other operating gains and income, coupled with lower finance costs.

The oil refiner posted a net profit of RM600.54 million for the second quarter ended June 30, 2026 (2QFY2026), compared with a net loss of RM183.24 million a year earlier, a bourse filing showed. This marked the group’s fourth consecutive quarter of net profit. 

Other operating gains stood at RM38.87 million for the quarter, reversing from an operating loss of RM22.69 million a year ago, while other income almost tripled to RM4.36 million from RM1.46 million. Finance costs fell 46% year-on-year to RM19.98 million.

Hengyuan, which makes refined petroleum products, also attributed the stronger performance in 2QFY2026 to efficient and stable operations, disciplined risk management and stronger refining margins.

The group’s revenue for 2QFY2026 jumped 55.69% to RM5.44 billion from RM3.49 billion a year earlier, supported by higher average product prices across all main products, despite lower sales volumes.

The group declared an interim dividend of 10 sen per share for the quarter, payable on Sept 28. Its previous dividend payout was in FY2022, also at 10 sen per share, marking its return to dividend payments after a four-year gap.

For the first half of FY2026 (1HFY2026), Hengyuan posted a net profit of RM1.13 billion, reversing from a net loss of RM353.69 million a year earlier. Revenue rose 70.76% to RM10.06 billion from RM5.89 billion.

Looking ahead, the group said tensions in the Middle East continue to pose risks to supply and shipping through the Strait of Hormuz and other key trade routes. Meanwhile, Opec+'s phased restoration of production and recent diplomatic efforts to ease regional tensions have, at times, exerted downward pressure on market conditions.

Hengyuan said movements in crude oil prices are principally reflected through crude differentials, inventory valuation and working capital requirements.

Against this backdrop, the group said it will continue to prioritise plant reliability and operational stability, optimise its crude slate and product mix, and maintain disciplined management of inventory, hedging and foreign exchange exposures.

Shares of Hengyuan closed down 10 sen or 4.88% at RM1.95 on Friday, giving it a market capitalisation of RM1.17 billion.