United Malacca set to benefit from higher CPO prices
01/04/2026 (New Straits Times), Kuala Lumpur - United Malacca Bhd is set to benefit from rising crude palm oil (CPO) prices, supported by strong growth in fresh fruit bunch (FFB) output, according to CIMB Securities Sdn Bhd.
The firm said the palm oil producer achieved an 18.4 per cent year-on-year (YoY) increase in FFB output in the nine-month period of financial year 2026 (9M FY26), reflecting successful yield-improvement efforts at the estate level.
The company's 9MFY26 core net profit rose 51.2 per cent YoY to RM128.6 million, surpassing CIMB Securities' forecast at 126 per cent and reaching 97 per cent of the full-year consensus estimate.
CIMB Securities said United Malacca's Malaysian operations remained the backbone of United Malacca's plantation earnings, contributing 80 per cent of total earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 9MFY26.
EBITDA from Malaysian plantations rose 31.1 per cent YoY to RM172.7 million, supported by a 19.6 per cent YoY increase in FFB production and a 16.2 per cent YoY rise in palm kernel prices to RM3,326 per tonne.
Higher production volumes also helped reduce unit costs, enhancing overall profitability.
Meanwhile, Indonesian operations saw EBITDA climb 27.3 per cent YoY to RM46.2 million, thanks to improved FFB output, higher PK prices, and stronger mill performance.
"We expect CPO prices to strengthen in 2026, supported by higher biodiesel mandates in Indonesia and the US, which will boost edible oil demand.
"In addition, potential El Niño conditions in the second half of 2026 could tighten supply," the firm said.
CIMB Securities raised United Malacca's earnings forecasts by 48 per cent for FY26 and 70 per cent for FY27, based on higher average CPO price assumptions of RM4,186 a tonne for 2026 and RM4,433 a tonne for 2027, as well as increased FFB output estimates of 521,906 tonnes for 2026 and 529,499 tonnes for 2027, factoring in higher fertiliser and diesel costs.
It kept a "Buy" call on the company with a higher target price of RM6.83.