KUALA LUMPUR (April 23): Chin Teck Plantations Bhd (KL:CHINTEK) has warned that crude palm oil (CPO) prices are expected to be volatile amid the uncertainties in Middle East geopolitical conflicts, although stronger global biodiesel demand could lend support to prices.
This comes after the group reported a 79.1% fall in net profit for the second quarter ended Feb 28, 2026 (2QFY2026) to RM3.67 million from RM17.56 million a year earlier, mainly due to heavier losses from associate and joint ventures as well as higher other expenses, according to the group's filing on Bursa Malaysia.
Revenue, however, rose 13.4% to RM67.37 million from RM59.43 million, driven by higher sales volume of CPO and palm kernel (PK), although fresh fruit bunch (FFB) sales volume declined and average selling prices for FFB, CPO and PK were lower.
The group did not declare any dividend for the quarter under review.
Chin Teck said share of results of an associate and joint ventures widened to a loss of RM11.75 million from RM1.20 million previously, due to lower profit contribution from its property development associate and larger losses incurred by its joint ventures engaged in oil palm plantation in Indonesia.
It added that harvesting at its joint venture estate in the South Sumatera province is still pending clearance by authorities following unrest in neighbouring villages.
Other expenses surged to RM5.01 million from RM396,000 mainly due to larger foreign exchange translation losses and fair value loss on consumable biological assets.
For the first six months ended Feb 28, 2026 (1HFY2026), net profit declined 24.7% to RM37.75 million from RM50.11 million in the same period a year ago, while revenue increased 17% to RM155.11 million from RM132.58 million.
Chin Teck has operations in Malaysia and investments in Indonesia. It expects plantation operations to remain satisfactory in FY2026, even as overall performance is projected to be lower than FY2025.
Looking ahead, the group said profit contribution from its 40%-owned associate West Synergy Sdn Bhd is expected to decline as the one-off sale of a large parcel of land is not expected to recur. The associate completed a RM424.4 million land disposal to a unit of Gamuda Bhd (KL:GAMUDA) in FY2025.
Shares in Chin Teck Plantations ended down 10 sen or 0.89% at RM11.10 on Thursday, valuing the group at RM1.01 billion.