SD Guthrie 1Q profit may ease on lower output – UOB Kay Hian
20/04/2026 (The Edge Malaysia), Kuala Lumpur - SD Guthrie Bhd may report lower net profit for the first quarter of 2026 on lower output that offset sharply higher palm oil prices in March, UOB Kay Hian flagged.
Net profit at the world’s largest palm oil producer by acreage is expected to moderate by up to 13% quarter-on-quarter to RM400 million due to a decline in fresh fruit bunch output amid a low production season, the research house said in an earnings preview note.
“Earnings are anticipated to pick up stronger thereafter, underpinned by a subsequent ramp-up in production output in addition to stronger” average selling prices, UOB Kay Hian said.
The outbreak of the Iran war has lifted palm oil by more than 19% in March. A push for a higher blend of palm-based methyl ester in biodiesel on the back of a surge in crude oil prices has also lifted prices of the edible oil used in everything from lipstick to soap.
While off highs, SD Guthrie has gained about 8% as geopolitical tensions in the Middle East have dragged into their second month.
In the first two months of 2026, production at SD Guthrie has fallen about 4% when compared to the same period in 2025, short of management’s mid-single-digit growth guidance for 2026, UOB Kay Hian noted.
Still, “we believe the company’s target is still well within reach” with year-on-year production growth potentially picking up over the course of 2026 in line with seasonal pick-up, the house said.
SD Guthrie’s downstream business could also be weaker on a quarter-on-quarter basis as weaker upstream production weighs on processing volume, UOB Kay Hian added.
Overall, the house kept its ‘buy’ call on SD Guthrie, with an unchanged target price of RM6.90.
“We like SDG for its favourable estate age profile and medium-term growth prospects, supported by new business verticals in renewables as well as industrial development,” UOB Kay Hian said. “We also view the stock as a big-cap sector top pick to ride the bullish CPO (crude palm oil) price environment.”