KUCHING: Sarawak Plantation Bhd (SPB) has posted higher group net profit of about RM26.9 million in second quarter ended June 30, 2025 (2Q2025), a marginal improvement from RM25.7 million a year ago despite a slight drop in revenue to RM131 million from RM131.5 million.
Company’s earnings per share improved to 9.63sen from 9.21sen. Group operating profit increased to RM27.7 million (2Q2024:RM25.5 million), mainly driven by better results of the oil palm estate operations as a result of higher production, SPB said in explanatory notes to its financial results.
In the current quarter under review, the oil palm operations comprise estate and mill operations, with estate operations recorded revenue of RM65.9 million and profit of RM23.8 million whereas mill operations contributed revenue of RM119.9 million and profit of RM6.5 million.
The oil palm operations segment generated 99.8 per cent of the group turnover of RM131 million.
Revenue from the oil palm operations dropped by RM0.5 million as compared to 2Q2024 due to lower sales volume of crude palm oil (CPO) and palm kernel (PK) by 7.9 per cent and 7.3 per cent respectively despite higher realised average selling prices of CPO and PK by 0.8 per cent and 40.9 per cent respectively.
The 2Q2025 financial results came in better than the immediate preceding quarter (1Q2025) as group pre-tax profit jumped to RM36.8 million from RM31 million as a result of a higher gain on fair value changes of biological assets of RM9 million as compared to RM4.1 million in 1Q2025.
In first half of 2025 (1H2025), SPB chalked up higher group net profit of RM49.5 million (1H2024:RM44.8 million) in tandem with growth in revenue to RM266.5 million (RM258.8 million), driving earnings per share to 17.74sen (16.04sen).
During the period under review, revenue of the oil palm operations surged by RM7.5 million to RM265.9 million (1H2024:RM258.4 million), thanks to higher realised average selling prices despite lower sales volumes of CPO and PK in 1H2025.
“Average selling prices of CPO and PK had increased approximately 10.5 per cent and 53.3 per cent respectively while sales volumes of CPO and PK had decreased by approximately 12.5 per cent and 14.1 per cent respectively for the current financial period,” said SPB .
On prospects for the current financial year ending December 31, 2025, SPB said the global economic outlook for 2H2025 remains uncertain.
“Though the US tariffs have shifted certain rates downward, tariffs remain historically high, rising input cost pressures and continued disruptions across global supply chain are expected to persist in the second half of the year.
In addition, on-going geopolitical tensions continue to cause volatility and uncertainties to the global market.
“Despite a potential decline in the CPO price during the peak crop season in the second half of the year, the outlook for CPO price remains firm, supported by demand from India and China and Indonesia’s biodiesel mandate.
Over the medium term, adverse weather condition, aging plantations and generally low replanting rates may limit production growth and hence help support prices,” it added.
In response to these evolving situations, SPB said the group reaffirms its strategic priorities to continue to focus on enhancing productivity and operational efficiency.
Cost efficiency remains a core focus and the group continues to exercise prudence in cash flow management to maintain its financial resilience.
Barring any unforeseen circumstances, SPB’s board of directors expects improved production performance in FY2025, and subject to a sustainable CPO price, anticipates achieving satisfactory financial results.
