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United Malacca Bhd (KL: UMCCA) reported a 15.8% year-on-year decline in its first-quarter net profit, as weaker contributions from its Malaysian plantation operations weighed on overall earnings despite a strong rebound in its Indonesian segment.
For the quarter ended July 31, 2026 (1QFY2027), net profit slipped to RM31.8 million from RM37.8 million in the corresponding period a year earlier, while revenue contracted 6% to RM180.1 million from RM191.6 million, according to the group's Bursa Malaysia filing.
The Malaysian operations bore the brunt of the decline, with earnings before interest, taxes, depreciation and amortisation (EBITDA) plunging 39% to RM34.5 million from RM56.7 million in 1QFY2026. The group attributed the shortfall to lower output of fresh fruit bunches (FFB) and elevated production costs, even as average crude palm oil (CPO) and palm kernel prices strengthened.
Average CPO prices for the Malaysian operations climbed to RM4,512 per tonne from RM4,001 per tonne, while palm kernel prices rose to RM3,523 per tonne from RM3,151 per tonne.
By contrast, the Indonesian operations delivered a sharp turnaround, with EBITDA surging to RM24.4 million from just RM9.3 million a year earlier. The improvement was supported by higher FFB production and lower unit production costs, even as average CPO prices in Indonesia softened.
Indonesian average CPO prices eased to RM3,372 per tonne from RM3,470 per tonne, while palm kernel prices edged marginally higher to RM3,089 per tonne from RM3,048 per tonne.
The group's investment holding segment, meanwhile, recorded a profit of RM926,000, down 19% from RM1.1 million in 1QFY2026, primarily due to foreign exchange losses stemming from the weakening of the Indonesian rupiah against the Malaysian ringgit.
Looking ahead, United Malacca expects FFB production to remain stable in FY2027, underpinned by a more favourable plantation age profile and continued operational improvements. However, the group flagged a potential downside risk, noting that 'FFB production could be affected by the anticipated super El Niño in the second half of the financial year.'
United Malacca said it remains focused on enhancing labour productivity, advancing mechanisation initiatives, driving cost efficiency, and increasing oil yield.
On the market, shares of United Malacca closed four sen, or 0.67%, lower at RM5.96 on Thursday, giving the group a market capitalisation of RM1.25 billion. The stock has gained 6.62% over the past 12 months.
Source: KLSE Screener