SD Guthrie Berhad (SDG) Q1 2026 earnings summary

Executive summary

• Earnings remained stable in 1Q FY2026, with net profit of RM560 million and diversified portfolio cushioning against sector-specific headwinds and volatile market conditions.

• Downstream and Industrial Development segments delivered higher profits, offsetting weaker Upstream performance due to lower CPO and PK prices and FFB production.

• Net earnings rose 13% sequentially from the previous quarter, mainly due to a land sale in Industrial Development.

• Operational resilience and supply chain flexibility, supported by new leadership and operational discipline, underpinned margin stability amid external shocks.

Financial highlights

• Revenue for 1Q FY2026 was RM4,690 million, down 3% year-over-year; net profit was RM560 million, down 1% year-over-year; PBIT was RM807 million.

• Basic EPS stood at 8.1 sen, a 1% decrease year-over-year.

• Downstream PBIT rose 43% year-over-year to RM109 million, while Upstream PBIT fell 30% to RM529 million.

• Industrial Development segment posted a gain of RM160 million from a land sale.

• Operating profit for Q1 2026 was RM804 million, with an effective tax rate of 23%.

Outlook and guidance

• CPO price forecasts for 2026 average RM4,275/MT, up 3.3% from earlier projections, supported by biofuel policies, weather risks, and tight supply.

• Palm supply expected to remain constrained by low Malaysian inventories and El Niño risks.

• Higher fertilizer costs may shift US planting toward soybeans, potentially increasing soybean oil supply and pressuring CPO prices.

• Focus remains on yield optimisation, cost management, and margin protection across segments.

• Longer-term resilience expected from industrial development and renewable energy initiatives.