SIME DARBY PLANTATION BERHAD: Financial Highlights and Challenges

SIME DARBY PLANTATION BERHAD, a leading Malaysian company specializing in the cultivation and management of plantations, particularly palm oil, has recently reported significant financial developments. The company, listed on Bursa Malaysia, has a diversified portfolio that includes rubber and cocoa plantations. It is committed to sustainable farming practices and has implemented various environmental and social initiatives.

Financial Performance

In the first half of 2025, SIME DARBY PLANTATION BERHAD, through its subsidiary SD Guthrie Bhd, reported a remarkable 71% year-on-year increase in net profit, reaching RM1.07 billion, up from RM626 million in the same period last year. This strong performance was primarily driven by its upstream operations, which saw profits more than double, supported by higher crude palm oil (CPO) and palm kernel (PK) prices. CPO prices rose by an average of 3%, while PK prices surged by 50%. Additionally, a 4% increase in fresh fruit bunch (FFB) yield further bolstered profitability.

For the second quarter of 2025, SD Guthrie Bhd’s net profit rose by 22% from the previous year, reaching RM505 million or 7.30 sen per share, compared to RM415 million or six sen per share in the same quarter of 2024. The company declared an interim dividend of 7.75 sen per share, with the ex-dividend date set for October 16 and the payment date on October 31.

Market Performance

As of August 5, 2025, SIME DARBY PLANTATION BERHAD’s share price closed at MYR 4.86. The company’s 52-week high was MYR 5.19, and the 52-week low was MYR 4.33. The market capitalization stood at MYR 32,849,640,000, with a price-to-earnings ratio of 13.04.

Challenges Ahead

Despite the strong financial performance, SD Guthrie anticipates challenges in its downstream segment for the year. The managing director, Datuk Mohamad Helmy Othman, highlighted that margin compression is expected to persist due to operational challenges in both Europe and the Asia-Pacific region. Rising raw material costs in Europe have compressed margins, as they outpaced selling price increases.

Conclusion

SIME DARBY PLANTATION BERHAD has demonstrated robust financial performance in the first half of 2025, driven by its upstream operations and favorable commodity prices. However, the company faces challenges in its downstream segment due to rising raw material costs and operational difficulties. Investors will be closely monitoring the company’s ability to navigate these challenges while maintaining its commitment to sustainable practices.