Lang
Johor Plantations Group Bhd (JPG) anticipates the palm oil market will maintain robust support throughout the second half of 2026, driven by a combination of seasonal restocking demand, Indonesia's ambitious B50 biodiesel mandate, and the natural peak crop cycle. The Malaysian plantation giant, however, is keeping a close watch on various external factors, including the expected El Niño weather phenomenon, evolving geopolitical tensions across the Middle East, and the ongoing implementation of the European Union Deforestation Regulation (EUDR).
The company recently announced its financial results for the second quarter (2Q26) ended June, part of its fiscal year ending December (FY26). During this period, JPG reported a net profit of RM51.1 million, marking a 32% year-on-year decline. This occurred despite a 4.4% increase in revenue, which reached RM415.8 million.
A similar trend was observed for the six-month period ending June 30. Net profit for the half-year softened by 32.8% year-on-year to RM101.5 million, while turnover saw a 4.6% rise, totaling RM772.5 million.
In a filing with Bursa Malaysia, JPG attributed its reduced profitability primarily to lower average selling prices for crude palm oil (CPO) and palm kernel (PK). Concurrently, the group faced higher operational costs, particularly from increased expenditures on manuring, purchases of fresh fruit bunches (FFB), harvesting and transportation activities, and repair and maintenance, alongside other operating costs incurred from January to June.
These challenges were partially mitigated by an increase in CPO and PK delivery volumes, which grew by 9.4% and 2.0% respectively. Furthermore, higher CPO sales volumes contributed positively to both the quarterly and half-year top-line figures.
Mohd Faris Adli Shukery, Managing Director of JPG, acknowledged that crop production remains subject to biological and seasonal influences. Nevertheless, he affirmed the group's commitment to strengthening its business foundations through disciplined estate management, accelerated replanting initiatives, expanding its external crop ecosystem, and the continuous development of its Integrated Sustainable Palm Oil Complex (iSPOC). 'These initiatives reinforce our integrated value chain strategy and position JPG for sustainable long-term value creation,' Shukery stated.
Compared to the preceding quarter ended March 31, JPG's net profit showed a marginal improvement from RM50.4 million to RM51.1 million, while revenue notably increased by 16.6% from RM356.7 million. This upward trend in turnover, which translated into a stable net profit, was largely due to higher CPO and PK sales volumes.
The company declared a dividend of 1.1 sen per share for 2Q26, bringing the total dividends declared for FY26 to 2.1 sen per share. Despite the recent profit dip, Johor Plantations Group Bhd expressed cautious optimism for delivering a satisfactory performance for the full fiscal year 2026, barring any unforeseen circumstances.
Source: The Star