United Plantations flags rising cost pressures as 1Q profit edges lower
22/04/2026 (The Edge), Kuala Lumpur - Rising costs are weighing on margins even as higher palm oil prices offer some relief, United Plantations Bhd flagged after reporting a weaker first quarter.
Fertiliser prices, fuel costs, labour expenses and other operating inputs are pressuring the industry, the company said in an exchange filing. Further sharp upside in prices, meanwhile, may be limited by seasonal rise in output while key buyers such as India and China may reduce buying interest, it said.
“Elevated prices, combined with uncertain global economic growth, may also lead to some degree of demand rationing, particularly in food consumption,” United Plantations warned.
While off highs from the war-driven surge, prices of the edible oil used in everything from lipstick to biodiesel are still up by nearly 13% so far this year. A push for a higher blend of palm-based methyl ester in biodiesel on the back of a surge in crude oil prices have also propped up prices of palm oil.
Net profit at the Perak-based planter for the first three months of 2026 (1QFY2026) was RM160.66 million, a 1.6% decline compared with the same quarter a year earlier, amid lower contribution from its joint venture Unifuji Sdn Bhd from foreign exchange hedging losses.
The raw material hedges, signed to secure margins on finished products, are expected to be recovered from future export proceeds upon delivery of the contracted products, United Plantations said.
Revenue for the quarter rose nearly 24% year-on-year to RM640.58 million, thanks to higher output as well as increased refinery sales volume.
Production of crude palm oil grew 4.5% while that of palm kernel climbed 10.7%. The average selling price was down 6% to RM4,172 per metric tonne for crude palm oil and 1% lower for palm kernel at RM3,254 per metric ton.
United Plantations said it remains focused on maintaining strong field standards, improving yields, enhancing productivity and containing costs.
“This will continue to be pursued through our ongoing mechanisation initiatives, disciplined agronomic practices and the replanting of older and less productive oil palm stands with our latest in-house superior planting materials,” the company added.
Shares of United Plantations rose 10 sen or 0.3% to close at RM33.72 on Wednesday, giving it a market capitalisation of RM21.05 billion.