PETALING JAYA: Hengyuan Refining Company Bhd reported a net profit of RM21.04 million for the third quarter ended Sept 30, 2025 (Q3’25), returning to the black from a net loss of RM165.1 million during the same period a year ago, and achieving its highest quarterly net profit since FY22.
The strong performance was mainly driven by enhanced plant efficiency and higher production yields, resulting from Hengyuan’s focus on operational excellence.
In addition, higher crack spreads, which have risen year-on-year and year-to-date compared to the same periods in 2024, contributed to an improved gross margin for the company.
Revenue declined 12% to RM3.62 billion in Q3’25, from RM4.12 billion a year ago.
The dip in revenue was due to reduced product prices and was further exacerbated by the weakening of the US dollar against the ringgit.
Chief financial officer Yeo Bee Hwan said the company posted its strongest quarterly result since FY22, driven by persistent efforts and investments to enhance plant efficiency, improve yields, and seize new opportunities to expand its business.
“In Q3 FY25, Hengyuan benefited from higher year-on-year crack spreads. Concern over supply cuts is driving strong demand for middle distillates such as diesel and jet fuel, which has been positive for margins.
“While the global oil market remains volatile, Hengyuan will continue to focus on operational efficiency, product quality, and prudent financial management. We remain committed to our target of returning to profitability by 2026,“ she said in a statement.
On Oct 23, 2025, Hengyuan raised gross proceeds of RM234 million following oversubscription of its rights issue.
The majority of the proceeds will be used to purchase additional crude oil feedstock, the primary raw material for refining and manufacturing petroleum products, to enhance production efficiency, reduce unit costs per barrel and strengthen the company’s competitiveness.
On Oct 30, 2025, the company’s warrants issued pursuant to the rights issue began trading on the main market of Bursa Malaysia.
