KUALA LUMPUR: SD Guthrie Bhd is staying upbeat about its performance for the financial year ending Dec 31, 2026 (FY26), supported by resilient crude palm oil (CPO) prices, disciplined operations and stronger contributions from its industrial development and other diversification businesses.
The group said CPO prices are expected to remain resilient, with potential upside extending into 2027, although elevated inventories and softer export demand could weigh on near-term market sentiment. Seasonal production declines are expected to help reduce inventories, while Indonesia's B50 biodiesel mandate and elevated crude oil prices could provide further support.
For the third quarter ended Sept 30, 2026 (3Q26), SD Guthrie's net profit fell 17% year-on-year (y-o-y) to RM773 million from RM935 million, while revenue edged down 0.3% to RM5.39 billion from RM5.41 billion.
Profit before interest and tax (PBIT) declined 10% y-o-y to RM1.13 billion from RM1.26 billion.
SD Guthrie attributed the lower y-o-y net earnings in 3Q26 to lower margins from the Asia Pacific bulk operations in its Midstream and Downstream segments, as well as lower contributions from land disposals from its Industrial Development business.
Despite the lower earnings, the group's fresh fruit bunch (FFB) production rose 8% to 2.48 million tonnes from 2.3 million tonnes a year earlier. Its average realised CPO price increased 3% to RM4,340 per tonne, while palm kernel prices climbed 7% to RM3,342 per tonne.
For the nine months ended Sept 30, 2026 (9M26), net profit rose 16% y-o-y to RM2.32 billion from RM2.01 billion, despite a 2% decline in revenue to RM15.03 billion.
SD Guthrie said the better year-to-date profitability was attributed to higher profits from its overall Upstream segment, Midstream and Industrial Development divisions, which compensated for the decline in profits from its downstream segment.
On a quarter-on-quarter (q-o-q) basis, bottom line was down 21.7% from RM987 million, despite a 9.1% improvement in turnover from RM4.94 billion.
The group said, while the performance from its upstream segment staged a 49% improvement q-o-q, its midstream, downstream and industrial development segments all saw softer numbers.
SD Guthrie said it would continue to focus on productivity and climate resilience in its upstream operations, while strengthening midstream activities to improve supply chain integration and feedstock security. Its downstream business will prioritise operational efficiency and a competitive product portfolio.
President and group chief executive Mohd Haris Mohd Arshad said the group was building complementary growth engines alongside its plantation business to strengthen earnings resilience and create long-term value.
The group added that its industrial development and renewable energy initiatives were expected to contribute increasingly to earnings diversification and long-term value creation.
In the meantime, Mohd Haris is urging Putrajaya to go ahead with its consideration to waive CPO export tax, which would go a long way in helping to clear record-high stockpiles and narrow the pricing gap with Indonesia.
In context, the proposal comes as Malaysia’s palm oil inventories climbed to 3.5 million tonnes in October, putting growing pressure on exporters because Indonesian palm oil continues to enjoy a significant price advantage.
Speaking to a media conference at its 3Q26 results briefing, Mohd Haris the last episode of a CPO supply glut some years back had hindered farmers and stockholders from being able to deliver their crops to be processed, as processing plants would not accept any more inventory.
"We believe this is irresponsible, and we are personally more concerned with this inability to push out FFB inventory because unlike soy, palm oil inventories cannot be stored," he pointed out.
As such, Mohd Haris said an export duty will have an impact on the profitability and livelihood of thousands of smallholders.
"We are not requesting an indefinite export duty waiver, but it will help significantly if the government can consider proceeding with it for just a few months for Malaysia to export to countries with high demand, such as India or Pakistan and lower our inventories," he added.