MKH Oil Palm (East Kalimantan) Berhad (“MKHOP”), an upstream oil palm plantation company based in East Kalimantan, Indonesia, reported a stellar net profit of RM39.94 million on the back of revenue of RM102.65 million for its first quarter ended 31 Dec, 2024. Earnings per share (EPS) stood at 3.14 sen for the quarter.

The stellar first quarter results for financial year ending 30 September 2025, in comparison, made up 62.2% of MKHOP’s full year results for its financial year ended 30 Sep, 2024 (FY24). For context, MKHOP delivered net profit of RM64.21 million in FY24. 

There were no comparative quarterly figures on a quarterly basis, as the company was only listed on the main market of Bursa Malaysia Securities Berhad on 30 April 2024. 

The good results were driven by a combination of higher crude palm oil (CPO) and palm kernel (PK) selling prices, which have been steadily trending up and higher CPO and PK quantity sold compared to preceding quarter. 

The company also proactively undertakes efficiency measures throughout its plantations and supply chain. 

For the first quarter, the average CPO/MT net of Indonesia’s export duty and levy, and PK/MT price for MKHOP stood at RM3,848 an RM2,659 respectively. It also recorded total production of fresh fruit bunches of 113,377 MT for this period. 

To date, MKHOP has a total land area of 18,205 ha, with a planted and matured area of 17,009 ha.  

MKHOP maintains a strong financial position with negligible borrowings. It’s cash pile increased to RM236.15mil for the period, from RM225.22 million in the previous quarter.  

Separately, MKHOP is in the midst of conducting its due diligence exercise for its planned land acquisitions. The relevant announcements will be made in stages in the near future. 

For the industry as a whole, palm oil prices are expected to remain high, with demand for palm oil in biodiesel production remaining robust, supported by policy mandates in Indonesia, where the biodiesel blend rate has increased to 40%, from 35% (B35) in 2024.

This implementation of B40 is expected to absorb an additional 1.2 to 1.7 million metric tonnes of CPO, thus further supporting higher CPO prices.

When asked about the upcoming second quarter results, MKH Oil Palm (East Kalimantan) Berhad Chairman Tan Sri Dato’ Alex Chen Kooi Chiew @ Cheng Ngi Chong is confident of satisfactory results with the favourable CPO price.

The Group’s prospect for financial year ending 30 September 2025 remains well-supported with strong market demand for CPO, which had been trading at approximately RM3,800/MT to RM4,000/MT (nett of export levy and duty) in Indonesia. 

There has been ongoing strong demand for palm oil supported by Indonesia’s strong biodiesel mandate, and tighter global supply. Also, the Group had continuously undertaken proactive measures to strengthen our competitiveness; including enhancing our water management system, fine-tuning our harvesting Standard Operating Procedures among others. 

We will continue to strengthen our performance and ensure continuous commitment in maximizing efficiencies and propelling growth forward. We remain committed to leading the way in responsible and sustainable agribusiness practices.

Given the above, the Board of Directors expected the Group to achieve satisfactory results for the financial year ending 30 September 2025.

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