Sarawak Plantation FY25 net profit rises to record RM90.8 mln

KUCHING (Feb 26): Sarawak Plantation Bhd closed its financial year 2025 (FY25) with a record net profit of RM90.8 million, up 21.2 per cent year-on-year (YoY) and exceeded analysts’ expectations.

The result accounted for 102 per cent of Public Investment Bank Bhd (PublicInvest Research)’s forecast and 112 per cent of consensus estimates.

Revenue for the fourth quarter ended FY25 (4QFY25) rose 19 per cent quarter-on-quarter (QoQ) and 15 per cent YoY to RM165 million, compared with RM144 million in 4QFY24 on the back of stronger fresh fruit bunches (FFB) production despite lower crude palm oil (CPO) prices.

FFB production in 4QFY25 climbed 26 per cent YoY to 111,511 metric tonnes (mt), lifting full-year output by 7 per cent YoY to 360,992 mt, indicating that harvesting and crop evacuation activities remained intact.

The higher output was also supported by increased purchases from external estates, with 4QFY25 marked the first quarter of higher external sourcing, resulting in stronger FFB throughput.

“This suggests crop quality remained satisfactory, as management typically maintains strict grading standards for third party FFB. As a result, this quarter saw a stronger FFB yield and eased estimated all-in cost of production, bringing the estate and mill margins remain satisfactory,” MBSB Investment Bank Bhd (MBSB Research) said in a separate note.

Operational metrics also strengthened during the year, with FY25 FFB yield improved to 17.93 mt per hectare (ha) from 15.91 mt per ha previously, while oil extraction rate (OER) was slightly lower at 19.41 per cent.

Core profit for 4QFY25 rose 11.4 per cent YoY to RM30.2 million from RM27.1 million, after excluding a RM4.7 million fair value loss on biological assets and RM0.2 million in minority interests.

For FY26, Sarawak Plantation has allocated RM65 million in capital expenditure, in which RM47 million will be used for replanting 1,000 ha and maintaining 8,000 ha of immature areas, with the balance earmarked for equipment upgrades and buildings.

After replanting 3,200 ha in FY25, the group plans a smaller replanting programme this year.

Despite posting 6 per cent FFB production growth in FY25, management is targeting a 25 per cent increase in FY26. Production cost is expected to decline by RM300 per mt to around RM2,400 per mt, supported by higher FFB yields and improved OER.

As at end-2025, total harvestable area stood at 20,500 ha, with 8,900 ha classified as immature. Encumbered land remained unchanged at 2,100 ha, with no recovery recorded during the year.

The group also plans to expand its seed production unit, targeting capacity of 2.5 million seeds per annum in FY26, representing a 60 per cent YoY increase.