United Plantations eyes satisfactory FY26
PETALING JAYA: United Plantations Bhd expects to deliver a "satisfactory" performance for its the financial year ending Dec 31, 2026 (FY26), underpinned by firm palm oil prices, resilient biodiesel demand and continued operational discipline.
The outlook comes after the group reported higher revenue but a marginal decline in net profit for the first quarter ended March 31, 2026 (1Q26).
In a filing with Bursa Malaysia, the plantations group said palm oil prices traded in a wide range during 1Q26, from a low of RM3,967 per tonne to a high of RM4,833 for the third-month position.
Prices, it said, strengthened towards the end of the quarter, supported by "escalating geopolitical tensions in the Middle East, firmer crude oil prices and renewed optimism surrounding higher biodiesel demand."
"Based on the current palm oil price levels, the supportive biodiesel demand outlook and the group's continued focus on securing the crop and maintaining operational discipline, the board of directors expects that the United Plantations will be able to perform satisfactorily in 2026," it said.
Looking ahead, United Plantations said key factors to closely track developments in global energy markets, biodiesel policies and weather conditions across major producing regions, as these will continue to shape palm oil price direction.
"Indonesia's continued push towards higher biodiesel blending, including the prospect of B50, together with record biofuel mandates in the United States, are supportive of vegetable oil demand and may continue to underpin palm oil prices." it said.
However, the group also flagged near-term headwinds, including demand normalisation from key importers and seasonal production recovery.
"Demand from key consuming countries such as India and China appears to have been brought forward into the early part of the year and may reduce incremental buying interest in the near term," it said.
The group added that production in Malaysia and Indonesia is expected to recover seasonally in the second quarter, which could contribute to some rebuilding in supply and thereby limit further sharp upside in prices.
Additionally, it cautioned that elevated price levels and uncertain global growth could also lead to "some degree of demand rationing, particularly in food consumption."
On the cost side, the group said the industry continues to face sustained pressure from fertiliser, fuel and labour inflation, which remains particularly challenging for smallholders.
While higher palm oil prices have provided some relief, it noted that this has been partly offset by increased production and transportation costs, adding that potential reductions in fertiliser usage could, over time, impact yields and output.
"Amidst these uncertainties, management remains focused on maintaining strong field standards, improving yields, enhancing productivity and containing costs wherever possible without compromising quality," it said.
For 1Q26, United Plantations saw its topline rise by 23.8% to RM640.58mil from RM517.63mil in the previous corresponding quarter, supported by higher production and sales volumes across both its plantation and refinery segments.
Net profit, however, slipped 1.6% to RM160.66mil from RM163.26mil in 1Q25, mainly due to timing differences in hedging of raw materials positions and foreign exchange movements within its refinery segment.
"The immediate hedging loss recognised upon closing of the earlier hedged raw materials positions will be reversed upon delivery of the finished goods in the next quarters," it said.
"The current refinery results are not reflective of the underlying business, and it is expected that the results of this segment will improve in the coming quarters."
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