KUALA LUMPUR (Oct 30): PPB Group Bhd (KL:PPB) could see weaker earnings for its third quarter ended Sept 30, 2026 (3QFY2026) following a sharp decline posted by key associate Wilmar International Ltd, said CIMB Securities.

The Singapore-listed palm-oil producer saw its core net profit dip by 25% in its third quarter to US$267.3 million (about RM1.08 billion), said the research house in a note on Friday.

Wilmar is the group's largest earnings contributor, accounting for around 80% of PPB’s pre-tax profit.

CIMB Securities said Wilmar's 3QFY2026 core net profit fell sharply due to higher input costs in its food products segment, on top of weaker soybean crushing margins in China.

“Wilmar expects weak Chinese consumption and soybean crushing margins to persist in 4Q2026, with no immediate consumer price increases planned to recover higher input costs,” said the research house.

Additionally, production at Wilmar’s Indonesian plantations is expected to decline amid worsening drought in South Sumatra and Kalimantan. Wilmar is currently investigating the impact of wildfire-related crop damage.

However, CIMB Securities said Malaysian pure-play upstream plantation companies with exposure in Indonesia, such as Kuala Lumpur Kepong Bhd (KL:KLK), SD Guthrie Bhd (KL:SDG) and Genting Plantations Bhd (KL:GENP), are expected to report stronger quarter-on-quarter earnings from their Indonesian divisions for the third quarter.