PETALING JAYA: Chin Teck Plantations Bhd expects its plantation operations to deliver satisfactory results in financial year 2026 (FY26), supported by sustained demand for biodiesel and edible oils.
Nevertheless, crude palm oil (CPO) prices are anticipated to remain volatile, reflecting the impact of global trade and economic policies, oilseed production patterns and broader market dynamics.
Executive chairman Goh Wei Lei noted that CPO prices remained elevated and relatively firm throughout FY25, driven by tight global edible oil supply and robust demand, particularly from neighbouring countries expanding their biodiesel programmes.
Palm kernel (PK) prices also strengthened during the year, supported by steady lauric oil demand and improving margins in the oleochemicals sector.
For FY25, the group’s revenue was derived entirely from the sale of fresh fruit bunches (FFB), CPO and PK in Malaysia, exposing it to commodity price fluctuations. Despite this, the group delivered a strong financial performance.
According to Chin Teck Plantations’ annual report filed with Bursa Malaysia, net profit surged by 129.56% to RM200.51 million, while revenue increased by 16.84% year-on-year to RM309.47 million.
The significant improvement in profitability was primarily attributable to higher revenue, supplemented by a notable contribution from its associate, West Synergy Sdn Bhd, following the completion of a land disposal to Gamuda DC Infrastructure Sdn Bhd.
Average selling prices improved across all major products, with FFB prices rising by 17.97% to RM965 per tonne, CPO prices increasing by 10.14% to RM4,312 per tonne, and PK prices surging by 43.12% to RM3,326 per tonne.
From an operational perspective, FFB production declined marginally by 0.68% to 247,456 tonnes, while FFB purchases rose by 9.77% to 66,118 tonnes.
Overall CPO production increased slightly by 0.78% to 49,175 tonnes, and PK production edged up by 0.53% to 12,059 tonnes.
Looking ahead, the group expects its overall financial performance in FY26 to remain satisfactory. However, outsized earnings contributions from West Synergy are not anticipated in the absence of further large-scale land disposals.
To mitigate commodity price volatility, the group continues to actively monitor market movements and enter into physical forward commodity sales contracts.
Concurrently, efforts remain focused on improving labour productivity and strengthening estate management practices to enhance cost efficiency.
During FY25, about 34% of total revenue (FY24: 61%) was derived from sales to two major customers (FY24: three).
These customers are considered creditworthy and have demonstrated consistently strong payment records.
Cost of sales increased primarily due to higher FFB purchases; nevertheless, gross profit rose substantially, supported by the significant increase in revenue.
Interest income increased by 6.29% to RM14.2 million, while dividend income rose by 11.3% to RM6.41 million.
The group continues to maintain a strong financial position. As at the end of FY25, cash and bank balances stood at RM536.81 million.
Consistent with prior years, the group remains committed to maintaining a debt-free capital structure while delivering steady dividend returns to shareholders.
Although the group does not have a formal dividend policy, it has consistently paid dividends.
In FY25, the group declared and paid a total single-tier dividend of 51 sen per stock unit, amounting to RM46.60 million, representing a 27.50% increase year-on-year.
Subsequent to the financial year end, on Dec 15, 2025, the group declared a first interim single-tier dividend of 8 sen per stock unit and a special single-tier dividend of 12 sen per stock unit in respect of FY26, totalling RM18.27 million. The dividends are payable on Jan 23.
