KUALA LUMPUR (July 22): United Plantations Bhd (KL:UTDPLT) reported a 22.2% decline in its second-quarter net profit compared with a year ago, as higher operating expenses and lower joint venture contributions weighed on its earnings.

Net profit for the quarter ended June 30, 2026 (2QFY2026) fell to RM194 million from RM249.38 million in 2QFY2025, its bourse filing showed. This was despite revenue edging up 0.54% to RM641.84 million from RM638.42 million.

The weaker bottom line was primarily due to a 16% rise in operating expenses to RM397.2 million from RM342.34 million and a steep 76.6% fall in its share of JV results to RM2.56 million from RM10.94 million.

In addition, the group saw a 23.2% drop in interest income to RM3.49 million from RM4.55 million while other operating income retreated 10% to RM15.79 million from RM17.55 million.

No dividend was declared with the latest results.

For the six months ended June 30, 2026 (1HFY2026), United Plantations' net profit declined 14.05% to RM354.66 million from RM412.64 million, even as cumulative revenue rose 10.93% to RM1.28 billion from RM1.16 billion.

While higher sales volume in the refinery segment drove top-line growth, profitability across both its plantation and refinery business weakened.

Its plantation business reported a 4.9% profit after-tax contraction to RM353.93 million from RM489.51 million in 1HFY2025. This came as higher production volumes and improved average palm kernel prices — up 2.4% to RM3.392 per tonne — were offset by a 4.7% decline in average crude palm oil selling prices to RM4,156 per tonne, causing a marginal revenue slip to RM749.12 million from RM751.79 million.

Its refinery profit after tax, meanwhile, sank 81% to RM10.02 million from RM51.49 million despite higher revenue rising 15.7% to RM846.2 million, no thanks to timing differences in raw material hedges versus the deliveries of finished goods, alongside the ringgit's appreciation and strengthening of the ringgit against the US dollar.

The group said the hedging losses are expected to reverse when the finished goods are delivered in the coming quarters.

Looking ahead, United Plantations said maintaining high yields, improving productivity and containing costs remain fundamental to safeguarding the group's competitiveness amidst continuing pressure from rising labour, energy and other input costs.

“The downstream refining sector continues to operate in a challenging environment, with profitability across the industry remaining under pressure due to intense regional competition and continued margin compression,” it added.

The group expects performance for the rest of FY2026 to remain satisfactory, supported by current palm oil prices, supportive biodiesel fundamentals and continued operational discipline.

Its share price ended 30 sen or 0.89% higher at RM34.04 on Wednesday, giving the group a market capitalisation of RM21.25 billion. Year-to-date, the stock has risen 13%.