Lang
KUALA LUMPUR – Genting Plantations Bhd foresees palm oil prices maintaining their strength in the near term, bolstered by increased biofuel blending mandates in key producing nations and robust energy prices, further influenced by ongoing geopolitical tensions.
However, the group cautioned that an anticipated seasonal surge in production, coupled with subdued demand from major importing countries, could temper any significant further upward movement in prices.
Looking ahead, Genting Plantations expects its fresh fruit bunch (FFB) production to sustain its positive trajectory. This momentum is supported by the addition of new harvesting areas and the natural progression of existing mature plantations into more productive, higher-yielding age profiles. The company did acknowledge, though, that an escalating probability of El Niño conditions could eventually impact yields, with any effects expected to manifest with a delay. The group's performance in 2026 will be closely tied to its core plantation segment, which fundamentally depends on palm product price fluctuations and the company's FFB output.
For the second quarter ended June 30, 2026 (2Q26), Genting Plantations reported a 26.8% drop in net profit, reaching RM140.9 million, or 15.71 sen per share, compared to RM192.6 million, or 21.46 sen per share, in the same period a year prior. Despite this, revenue for the quarter surged by 30% to RM996.8 million from RM767 million, primarily driven by enhanced sales volumes in its downstream manufacturing segment and higher FFB production. The year-on-year increase in FFB production was largely attributed to improved cropping trends across certain estates, aided by favorable weather conditions.
The average crude palm oil (CPO) price achieved by the group stood at RM3,758 per tonne in 2Q26 and RM3,694 per tonne for the first half of 2026 (1H26). Palm kernel prices averaged RM3,478 per tonne and RM3,329 per tonne for 2Q26 and 1H26, respectively.
Across the first half of 2026, the company’s net profit declined by 17.7% to RM209 million from RM253.8 million, even as revenue climbed 16% to RM1.72 billion from RM1.49 billion. The board declared an interim single-tier dividend of 10 sen per share, consistent with the previous year.
An analysis of segment performance revealed that the plantation division recorded higher adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA), primarily due to increased FFB production. This positive impact was, however, partially offset by lower CPO prices. The downstream manufacturing segment also showed improved performance, benefiting from increased sales volume and better margins. Nevertheless, the group anticipates that the downstream sector will continue to experience margin pressure due to persistent excess refining capacity in Indonesia and intense competition from Indonesian counterparts.
Beyond its core operations, the property segment remains focused on its township developments and aims to accelerate the Johor Tech Smart City project within the Johor-Singapore Special Economic Zone. Meanwhile, the AgTech segment is committed to fostering innovation by leveraging artificial intelligence, data analytics, and genomic research to develop superior planting materials and sustainable biological solutions.
Source: The Star