Latest news with #FFB
The Star
30-06-2025
- Business
- The Star
Kim Loong anticipates higher FFB production
PETALING JAYA: Kim Loong Resources Bhd expects the fresh fruit bunch (FFB) production for financial year 2026 (FY26) to increase by 5% to 10%, supported by a better age profile of young palms in productive areas and its replanting programme. According to TA Research, the group plans to replant about 300ha to 500ha in FY26 and projects the average crude palm oil (CPO) price to hover at around RM4,000 per tonne for the year. 'We maintain a cautious view on CPO prices, weighed down by softer export demand from major importing countries and a projected increase in global vegetable oil supply,' the research house said. It maintained Kim Loong on 'hold' with an unchanged target price of RM2.31, based on 15 times 2026 earnings per share. TA Research said the group's 1Q26 results were in line with expectations. The group posted a 13.7% decline in core net profit to RM41.1mil for 1Q26 (excluding exceptional items), despite a 6% increase in revenue to RM411.7mil. The weaker earnings were mainly attributed to reduced processing margins from its milling operations. The plantation operations recorded a profit of RM47.3mil in 1Q26, a 35.4% increase from RM34.9mil a year ago, driven by a 15.1% increase in the average FFB selling price and a 3% rise in FFB production. During the quarter, average CPO selling price rose 11% to RM4,622 per tonne from RM4,180 per tonne a year ago, while the average FFB selling price increased 15% to RM906 per tonne from RM787 per tonne. The company said the plantation operations did not face problems in selling FFB produce as most of it was supplied to mills within the group. Meanwhile, the milling operations' profit fell 43.8% to RM21.8mil from RM38.7mil a year ago, mainly due to lower processing margins, dragged by a reduced oil extraction rate. The research house pointed out that although the average CPO selling price rose by 10.6% to RM4,622 per tonne, CPO production fell by 5.9% to 71,200 tonnes, while CPO sales dropped by 8.8% to 71,000 tonnes.
The Star
26-06-2025
- Business
- The Star
Kim Loong 1Q revenue up 6% to RM412mil
The company's revenue rose 6% to RM411.7mil. PETALING JAYA: Kim Loong Resources Bhd is targeting to achieve a 5% to 10% increase in fresh fruit bunch (FFB) production for the current financial year ending Jan 31, 2026, after taking into account the improved age profile of young productive palms and its ongoing replanting programme. Releasing results yesterday for its first quarter ended April 30 (1Q26), Kim Loong saw net profit drop 15.3% year-on-year (y-o-y) to RM41.9mil, despite a 6% growth in revenue to RM411.7mil. The group attributed the weaker profit to lower processing margin from milling operations, although higher FFB selling price and better FFB production contributed to the improved turnover. Compared to the preceding quarter ended Jan 31, net profit almost doubled from RM22.8mil, despite a drop in revenue from RM443.3mil, which it attributed to higher FFB production.
The Star
26-06-2025
- Business
- The Star
Kim Loong hopes for better FFB production in FY26
PETALING JAYA: Kim Loong Resources Bhd is targeting to achieve a 5% to 10% increase in fresh fruit bunch (FFB) production for the current financial year ending January 31, 2026, after taking into account the improved age profile of young productive palms and its ongoing replanting programme. As for palm oil milling operations, the group expects to achieve a total processing throughput of 1.6 million tonnes of FFB for the current financial year. Releasing results yesterday for its first quarter ended April 30 (1Q26), Kim Loong Resources saw net profit drop 15.3% year-on-year (y-o-y) to RM41.9mil, despite a 6% growth in revenue to RM411.7mil. The group attributed the weaker profit to lower processing margin from milling operations, although higher FFB selling price and better FFB production contributed to the improved turnover. Compared to the preceding quarter ended January 31, net profit almost doubled from RM22.8mil, despite a slight drop in revenue from RM443.3mil, which Kim Loong Resources attributed to higher FFB production.
The Star
12-06-2025
- Business
- The Star
Earnings pressure seen
RHB Research remained cautiously optimistic on CPO prices. PETALING JAYA: Malaysia's plantation sector could face fresh earnings pressure in the second half of this financial year, as a new layer of taxation takes effect from July 1 under the expanded sales and service tax (SST) regime. According to RHB Research, the revised tax structure, which would impose a 5% levy on several upstream and downstream products, would add to the cost burdens of planters. It noted that the tax would apply to fresh fruit bunches (FFB), empty fruit bunches (EFB), palm kernel shells (PKS), palm fatty acid distillate (PFAD), palm kernel fatty acid distillate (PKFAD), and palm kernel oil (PKO). RHB Research said it expected the biggest negative impact to come from the purchase of external FFB for crude palm oil millers, as well as external PKO purchases for downstream planters. 'This tax is to be levied on top of all the other taxes the palm oil industry currently already faces – including windfall taxes, sales tax of CPO in East Malaysia, and export tax on all palm oil products,' the brokerage said, noting the negative impact of the expanded SST. 'While there can be some offsetting factor in the form of additional tax to be levied on sales of EFB, PKS and PFAD, among others, we believe the net earnings impact will still be negative,' it added. Based on RHB Research's calculations, the earnings drag could range between 0.3% and 11% annually for the companies it covers, depending on the volume of externally sourced FFB. 'We base this calculation on external FFB purchased in Malaysia multiplied by the current FFB price of RM850 per tonne and multiplied further by 5%,' it explained. The research house flagged FGV Holdings Bhd as the most exposed, noting that approximately 70% of its FFB intake comes from outside sources. RHB Research added that limited disclosures on other inputs such as PKO purchases and sales of by-products made it difficult to quantify the full extent of the impact. 'However, we are unable to calculate the impact of the purchase of external PKO and sales of other products, as these disclosures are not given,' it explained. While it continues to engage companies for greater clarity, RHB Research said it was maintaining its earnings forecasts for now. 'Earnings forecasts are unchanged for now till we obtain more clarification.' RHB Research placed the sector's rating 'under review', although it remained cautiously optimistic on CPO prices. 'We acknowledge that geopolitical risks have led to a CPO price destruction over the last couple of months,' it said. RHB Research's CPO price assumption of RM4,300 per tonne for the year is unlikely to be achieved based on the current trajectory. This is because year-to-date, the CPO price averaged at RM4,400 per tonne. However, it expected CPO prices to post a recovery towards the year end as seasonal production comes off its peak. It added that planters continue to deliver earnings-wise, while valuations remain depressed at this juncture. Its top picks remained unchanged, comprising Jaya Tiasa Holdings Bhd , Sarawak Oil Palms Bhd and Sime Darby Plantation Bhd.
Borneo Post
12-06-2025
- Business
- Borneo Post
Analysis: SST could cut plantation earnings by up to 11 pct annually
The biggest blow is expected to come from the purchase of external FFB by CPO millers and external PKO by downstream producers. — AFP photo KUCHING: The plantation sector may see its earnings drop by as much as 11 per cent per annum due to the expanded Sales and Service Tax (SST) coming into effect on 1 July, according to RHB Investment Bank Bhd (RHB Research). The house said the new 5 per cent tax will apply to several palm oil-related items including fresh fruit bunches (FFB), empty fruit bunches (EFB), palm kernel shells (PKS), palm fatty acid distillate (PFAD), palm kernel fatty acid distillate (PKFAD), and palm kernel oil (PKO), among others. 'We expect the expanded SST to be negative for the sector,' it said in a note on Thursday, adding that the estimated earnings impact could range from 0.3 to 11 per cent per annum for Malaysian plantation companies under its coverage. It noted that FGV Holdings Bhd is likely to face the most significant hit given that about 70 per cent of its FFB is sourced externally. The biggest blow is expected to come from the purchase of external FFB by crude palm oil (CPO) millers and external PKO by downstream producers. 'This tax is to be levied on top of all the other taxes the palm oil industry currently already faces – including windfall taxes, sales tax of CPO in East Malaysia, and export tax on all palm oil products. 'While there can be some offsetting factor in the form of additional tax to be levied on sales of EFB, PKS, PFAD, etc, we believe the nett earnings impact will still be negative,' it added. RHB Research calculated the estimated earnings impact using a base price of RM850 per tonne for FFB and based it on the volume of external FFB purchases, though full figures for external PKO purchases and other sales were not available due to limited disclosures. Despite the negative outlook from the new tax, RHB Research has kept its earnings forecasts unchanged for now, pending further clarification from the companies under its coverage. The research house has also placed its sector rating under review, down from a previous overweight stance. 'Geopolitical risks have led to a CPO price destruction over the last couple of months and our price assumption of RM4,300 per tonne for the year is unlikely to be achieved,' it said. The year-to-date CPO price is around RM4,400 per tonne, and analysts expects a potential recovery towards the end of the year as production slows. Its top stock picks remain unchanged and include Johor Plantations Group, Sarawak Oil Palms, SD Guthrie, Bumitama Agri Ltd, and PP London Sumatra Indonesia Tbk. analysis economy expanded SST palm oil plantation SST
