MKHOP optimistic on CPO prices in 2026

KUCHING (Jan 30): MKH Oil Palm (East Kalimantan) Bhd remains optimistic that crude palm oil (CPO) prices will stay well supported in 2026, with current prices in Indonesia trading at about RM3,350 to RM3,550 per metric tonne, net of export levy and duty.

Group non-independent non-executive chairman Tan Sri Dato Chen Kooi Chiew @ Cheng Ngi Chong said the outlook reflects sustained strong demand for palm oil amid tighter global supply, highlighted in the group’s 2025 annual report.

The positive market conditions supported MKHOP’s strongest financial performance to date.

For FY2025, the group recorded its highest-ever full-year revenue of RM363.2 million and profit before tax (PBT) of RM107.3 million.

This represented a 3.1 per cent increase in revenue from RM352.2 million and a 26.2 per cent rise in PBT from RM85.0 million in the previous financial year.

Operational improvements also contributed to the results, as the group’s oil palm plantation in East Kalimantan has adopted mechanically assisted fresh fruit bunch (FFB) collection, alongside software applications to enhance monitoring and operational oversight.

These initiatives form part of broader efforts to strengthen competitiveness and improve efficiency.

MKHOP continues to enhance its water management system while maximising crop collection and quality through ongoing mechanisation.

The group has also optimised its Plantation and Mill Management System (PMMS) software to track FFB evacuation from the fields to the mill, supporting higher production efficiency and improved oil extraction rates (OER).

Furthermore, the development of Indonesia’s new administrative capital, Nusantara, in East Kalimantan is expected to further support the region where MKHOP’s plantation is located.

Chen noted that businesses in the area are well positioned to benefit from increased economic activity, job creation and infrastructure development linked to the new capital.

On shareholder returns, the board said it remains focused on balancing dividend distribution with the need to retain funds for long-term growth.

For FY2025, the company declared and paid a total single-tier dividend of 4 sen per share, amounting to approximately RM40.6 million, or about 50.9 per cent of profit attributable to owners of the parent.

MKHOP also reaffirmed its commitment to corporate social responsibility. During FY2025, the group contributed around RM1.1 million to community engagement initiatives across its Malaysian and Indonesian operations, benefiting local communities and charitable organisations.