21-07-2025
United Plantations focused on higher yields
PETALING JAYA: United Plantations Bhd is working towards an improvement of its palm oil yields and productivity.
The company said in its latest quarterly report that it has embarked on mechanisation initiatives and replanting of older, less productive oil palm stands with its latest in-house high yielding planting breeds and materials.
This is an important initiative amid various industry challenges that the sector is up against, it said.
'The tireless efforts by management to support high yields are viewed as essential in maintaining competitiveness amidst rising labour, energy and input costs.
'Looking ahead, we remain mindful of the challenges that may arise in the remaining part of the year,' the company said.
It still anticipates to deliver a satisfactory set of results for 2025.
Apart from this, United Plantations said the weather will play a key role in determining the direction of the palm oil sector – as the peak production months of July to September approaches.
'With export volumes showing signs of slowing, there is a risk that rising output could lead to a buildup of stocks and renewed pressure on prices,' it said.
Prices will also be influenced by the global trading environment in the midst of the trade war and focus on tariff barriers, it said.
While Indonesia's ramp-up in biodiesel production is helping to support palm oil prices, concerns persist regarding the pace and effectiveness of the B40 Biodiesel Mandate, as logistical and economic challenges may hinder its full implementation, it noted.
In its second quarter ended June 30 of the financial year 2025 (FY25), United Plantations' net profit rose by 34.1% year-on-year (y-o-y) to RM249.38mil.
Its revenues rose by 16.9% y-o-y to RM638.42mil for the latest quarter driven by the plantation and refinery segments.
Earnings per share rose by 34% y-o-y to 40.08 sen.
Commenting further, the company said revenues for its plantation segment had risen on higher production and prices for crude palm oil (CPO) and palm kernel (PK).
'CPO and PK production increased by 22.2% and 23.9% respectively.
'PK average selling price was higher marginally by 1.2% whereas CPO average selling price was lower by 3.3%,' it said.
Plantations segment profits were also positively influenced by lower manuring costs, it said.
Meanwhile, it said profits in the refinery segment had seen a significant improvement on higher palm oil sales volumes and reversal of hedging losses experienced during the preceding quarter.
The company said its refinery segment's pre-tax profit includes the equity-accounted share of results from its joint venture, Unifuji Sdn Bhd.
The joint venture recorded a profit before tax of RM24.6mil and contributed a share of net profit of RM10.9mil in the current quarter to the group.
Unifuji had seen an improvement in sales volumes, better margins and stronger foreign-exchange hedging gains in the current quarter, it said.
