18/08/2025 (The Edge Malaysia) - NEGRI SEMBILAN OIL PALMS BHD (KL:NSOP) has been quietly outshining its peers in the small-cap plantation space in terms of earnings growth, while delivering regular dividend payouts. The cash-rich group — which is involved in the cultivation of oil palms and the processing and sale of fresh fruit bunches (FFB), crude palm oil (CPO) and palm kernel (PK) — is 55.13%-owned by Tiong Thye Co Sdn Bhd, an entity controlled by the Goh family from Singapore.

For the financial year ended Dec 31, 2024 (FY2024), NSOP’s net profit more than doubled to RM36.5 million, from RM18.1 million in FY2023, marking its highest earnings in 17 years. Revenue rose 21.3% to RM112.55 million, from RM92.8 million.

In FY2022, the group posted a net profit of RM27.8 million on revenue of RM111.76 million.

Its net profit performance translates into a compound annual growth rate (CAGR) of 11.2% over the past three years, earning NSOP the Highest Growth in Profit After Tax (PAT) award at The Edge Malaysia Centurion Club Corporate Awards 2025 — repeating its win in the previous year.

The group’s improved performance in FY2024 was supported by stronger average selling prices of FFB, CPO and PK, which rose 15.07%, 1.37% and 21.48% respectively from the previous year. While FFB sales volume increased 31.88%, CPO and PK sales volumes declined 25.72% and 35.16% respectively.

NSOP attributed the price fluctuations to shifts in market demand and vegetable oil inventories, volatility in the ringgit against the US dollar, concerns over extreme weather, and geopolitical uncertainties.

Although NSOP does not have a formal dividend policy, it has been consistently rewarding shareholders with attractive payouts — 17 sen per share in FY2022, 12 sen per share in FY2023, and 20 sen per share in FY2024. The group remains on a strong financial footing, with zero borrowings and cash and bank balances amounting to RM176.52 million as at end-FY2024.

Steady earnings and consistent dividends have supported a gradual rise in its share price, from RM3.21 (adjusted) on March 31, 2023, to RM4.12 by March 28, 2025.

NSOP currently operates four estates — Ladang Senama, Ladang Ibam, Ladang Gula and Ladang Maran — and has a combined land bank of 7,667ha. It also owns two palm oil mills with a total milling capacity of 40 tonnes per hour.

NSOP’s associates and joint ventures include Huay Guan Investment Pte Ltd, Sin Thye Management Sdn Bhd and Sin Thye Oil Mills Sdn Bhd.

Its 40%-owned joint venture, Chin Thye Investment Pte Ltd, which owns an oil palm plantation in South Sumatera Province, Indonesia, has been underperforming, as the harvesting of mature fields has been delayed because of unrest in the villages neighbouring the estate. As a result, NSOP recorded a share of loss amounting to RM883,709 from this investment in FY2024.

Looking ahead, NSOP flagged external risks such as the imposition of reciprocal tariffs by the US, which has heightened global trade tensions, rattled markets and dampened investor sentiment — all of which may weigh on commodity prices.

Labour shortage remains a key challenge, especially in securing guest workers, said the group. The situation has improved, however, with the allocation and active utilisation of new guest worker quotas approved by the authorities. NSOP continues to diversify its labour sources and has implemented competitive remuneration and improved worker welfare to attract and retain manpower.

Despite these challenges, NSOP remains optimistic about the long-term outlook for palm oil, underpinned by robust global demand. “Palm oil is widely available and affordable, and it is one of the vital oils in meeting the world’s dietary needs. Besides its nutritional value, palm oil also has vast potential as a renewable energy source,” the group said in its 2024 annual report.

As part of its long-term sustainability strategy, NSOP has put in place a 10-year replanting schedule, reviewed quarterly based on market and environmental conditions. In FY2024, it replanted 141ha of old and low-yielding palms. Roughly 275ha are slated for replanting in FY2025.

The group has also adopted commercially available high-yielding seedlings in its replanting programme. In addition, infrastructure improvements are made during replanting to enhance harvesting efficiency and FFB evacuation operations.

https://theedgemalaysia.com/node/766602