KUALA LUMPUR (Aug 21): Far East Holdings Bhd (KL:FAREAST) saw its second-quarter net profit drop 35.4% year-on-year, as lower contributions from associates, together with lower harvest and production volumes, outweighed higher crude palm oil (CPO) and palm-kernel prices.

Net profit for the three months ended June 30, 2026 (2QFY2026) came to RM32.29 million, down from RM49.99 million in the same quarter last year, following a 33.5% or RM6.71 million drop in its share of profit from associates, its bourse filing showed.

Revenue declined 5.3% to RM229.57 million from RM242.39 million, mainly due to a 26% drop in fresh fruit bunch (FFB) production to 66,430 tonnes, while FFB processed by its mills fell 27% to 168,520 tonnes. CPO production was down 24% to 12,991 tonnes, while palm-kernel production declined 28% to 3,164 tonnes.

This was partly cushioned by a higher average CPO price, which rose 12% to RM4,524 per tonne from RM4,054 per tonne, while the average palm kernel price rose 9% to RM3,623 per tonne from RM3,319 per tonne.

An interim dividend of six sen per share was declared with the quarterly results, to be paid on Sept 21, raising payout for the first half of FY2026 (1HFY2026) to 21 sen, up from 15 sen in 1HFY2025.

The group made a net profit of RM78.05 million for 1HFY2026, down 20.3% from RM97.91 million in 1HFY2025, though revenue increased 4.6% to RM469 million from RM448.33 million. The lower profit was due to lower FFB production due to ongoing estate replanting programmes, lower share of profit from associates and higher operating expenses.

On prospects, Far East said CPO and kernel prices are expected to remain stable this year, while FFB production is anticipated “to remain comparable with the previous financial year”.

However, rising input costs, particularly fertiliser, fuel and labour costs, together with climate variability, are expected to continue posing operational challenges to the group’s performance.

On Friday, shares of Far East ended five sen or 1.3% at RM3.91, giving the plantation group a market capitalisation of RM2.32 billion.