Latest news with #EFB
The Star
12-06-2025
- Business
- The Star
Earnings pressure seen
RHB Research remained cautiously optimistic on CPO prices. PETALING JAYA: Malaysia's plantation sector could face fresh earnings pressure in the second half of this financial year, as a new layer of taxation takes effect from July 1 under the expanded sales and service tax (SST) regime. According to RHB Research, the revised tax structure, which would impose a 5% levy on several upstream and downstream products, would add to the cost burdens of planters. It noted that the tax would apply to fresh fruit bunches (FFB), empty fruit bunches (EFB), palm kernel shells (PKS), palm fatty acid distillate (PFAD), palm kernel fatty acid distillate (PKFAD), and palm kernel oil (PKO). RHB Research said it expected the biggest negative impact to come from the purchase of external FFB for crude palm oil millers, as well as external PKO purchases for downstream planters. 'This tax is to be levied on top of all the other taxes the palm oil industry currently already faces – including windfall taxes, sales tax of CPO in East Malaysia, and export tax on all palm oil products,' the brokerage said, noting the negative impact of the expanded SST. 'While there can be some offsetting factor in the form of additional tax to be levied on sales of EFB, PKS and PFAD, among others, we believe the net earnings impact will still be negative,' it added. Based on RHB Research's calculations, the earnings drag could range between 0.3% and 11% annually for the companies it covers, depending on the volume of externally sourced FFB. 'We base this calculation on external FFB purchased in Malaysia multiplied by the current FFB price of RM850 per tonne and multiplied further by 5%,' it explained. The research house flagged FGV Holdings Bhd as the most exposed, noting that approximately 70% of its FFB intake comes from outside sources. RHB Research added that limited disclosures on other inputs such as PKO purchases and sales of by-products made it difficult to quantify the full extent of the impact. 'However, we are unable to calculate the impact of the purchase of external PKO and sales of other products, as these disclosures are not given,' it explained. While it continues to engage companies for greater clarity, RHB Research said it was maintaining its earnings forecasts for now. 'Earnings forecasts are unchanged for now till we obtain more clarification.' RHB Research placed the sector's rating 'under review', although it remained cautiously optimistic on CPO prices. 'We acknowledge that geopolitical risks have led to a CPO price destruction over the last couple of months,' it said. RHB Research's CPO price assumption of RM4,300 per tonne for the year is unlikely to be achieved based on the current trajectory. This is because year-to-date, the CPO price averaged at RM4,400 per tonne. However, it expected CPO prices to post a recovery towards the year end as seasonal production comes off its peak. It added that planters continue to deliver earnings-wise, while valuations remain depressed at this juncture. Its top picks remained unchanged, comprising Jaya Tiasa Holdings Bhd , Sarawak Oil Palms Bhd and Sime Darby Plantation Bhd.
Borneo Post
12-06-2025
- Business
- Borneo Post
Analysis: SST could cut plantation earnings by up to 11 pct annually
The biggest blow is expected to come from the purchase of external FFB by CPO millers and external PKO by downstream producers. — AFP photo KUCHING: The plantation sector may see its earnings drop by as much as 11 per cent per annum due to the expanded Sales and Service Tax (SST) coming into effect on 1 July, according to RHB Investment Bank Bhd (RHB Research). The house said the new 5 per cent tax will apply to several palm oil-related items including fresh fruit bunches (FFB), empty fruit bunches (EFB), palm kernel shells (PKS), palm fatty acid distillate (PFAD), palm kernel fatty acid distillate (PKFAD), and palm kernel oil (PKO), among others. 'We expect the expanded SST to be negative for the sector,' it said in a note on Thursday, adding that the estimated earnings impact could range from 0.3 to 11 per cent per annum for Malaysian plantation companies under its coverage. It noted that FGV Holdings Bhd is likely to face the most significant hit given that about 70 per cent of its FFB is sourced externally. The biggest blow is expected to come from the purchase of external FFB by crude palm oil (CPO) millers and external PKO by downstream producers. 'This tax is to be levied on top of all the other taxes the palm oil industry currently already faces – including windfall taxes, sales tax of CPO in East Malaysia, and export tax on all palm oil products. 'While there can be some offsetting factor in the form of additional tax to be levied on sales of EFB, PKS, PFAD, etc, we believe the nett earnings impact will still be negative,' it added. RHB Research calculated the estimated earnings impact using a base price of RM850 per tonne for FFB and based it on the volume of external FFB purchases, though full figures for external PKO purchases and other sales were not available due to limited disclosures. Despite the negative outlook from the new tax, RHB Research has kept its earnings forecasts unchanged for now, pending further clarification from the companies under its coverage. The research house has also placed its sector rating under review, down from a previous overweight stance. 'Geopolitical risks have led to a CPO price destruction over the last couple of months and our price assumption of RM4,300 per tonne for the year is unlikely to be achieved,' it said. The year-to-date CPO price is around RM4,400 per tonne, and analysts expects a potential recovery towards the end of the year as production slows. Its top stock picks remain unchanged and include Johor Plantations Group, Sarawak Oil Palms, SD Guthrie, Bumitama Agri Ltd, and PP London Sumatra Indonesia Tbk. analysis economy expanded SST palm oil plantation SST
The Star
12-06-2025
- Business
- The Star
Planters brace for profit hit under expanded SST regime
PETALING JAYA: Malaysia's plantation sector could face fresh earnings pressure in the second half of the year, as a new layer of taxation takes effect from July 1 under the expanded sales and service tax (SST) regime. According to RHB Research, the revised tax structure, which would impose a 5% levy on several upstream and downstream products, would add to the cost burdens of planters. It noted that the tax would apply to fresh fruit bunches (FFB), empty fruit bunches (EFB), palm kernel shells (PKS), palm fatty acid distillate (PFAD), palm kernel fatty acid distillate (PKFAD), and palm kernel oil (PKO). RHB Research said it expected the biggest negative impact to come from the purchase of external FFB for CPO millers, as well as external PKO purchases for downstream planters. 'This tax is to be levied on top of all the other taxes the palm oil industry currently already faces – including windfall taxes, sales tax of crude palm oil (CPO) in East Malaysia, and export tax on all palm oil products,' the brokerage said, noting the negative impact of the expanded SST. 'While there can be some offsetting factor in the form of additional tax to be levied on sales of EFB, PKS and PFAD, among others, we believe the net earnings impact will still be negative,' it added. Based on RHB Research's calculations, the earnings drag could range between 0.3% and 11% annually for the companies it covers, depending on the volume of externally sourced FFB. 'We base this calculation on external FFB purchased in Malaysia multiplied by the current FFB price of RM850 per tonne and multiplied further by 5%,' it explained. The research house flagged FGV Holdings Bhd as the most exposed, noting that approximately 70% of its FFB intake comes from outside sources. RHB Research added that limited disclosures on other inputs such as PKO purchases and sales of by-products made it difficult to quantify the full extent of the impact. 'However, we are unable to calculate the impact of the purchase of external PKO and sales of other products, as these disclosures are not given,' it explained. While it continues to engage companies for greater clarity, RHB Research said it was maintaining its earnings forecasts for now. 'Earnings forecasts are unchanged for now till we obtain more clarification.' RHB Research placed the sector's rating 'under review', although it remained cautiously optimistic on CPO prices. 'We acknowledge that geopolitical risks have led to a CPO price destruction over the last couple of months,' it said. RHB Research's CPO price assumption of RM4,300 per tonne for the year is unlikely to be achieved based on the current trajectory, as year-to-date, the CPO price averaged at RM4,400 per tonne. However, it expected CPO prices to post a recovery towards the year end as seasonal production comes off its peak. It added that planters continue to deliver earnings-wise, while valuations remain depressed at this juncture. Its top picks remained unchanged, comprising Jaya Tiasa Holdings Bhd , Sarawak Oil Palms Bhd and Sime Darby Plantation Bhd.
Daily Maverick
19-05-2025
- General
- Daily Maverick
The Chelsea Flower Show 2025, and more from around the world
Moving, tragic, surprising, inspiring, terrifying, shocking... This is a selection of images from our planet, over the past three days. Trainee beekeeping student Mandy Topping poses for a photograph at the Randalstown and District Beekeeper's Association apiary set in the private estate of Lord O'Neill at Shane's Castle on May 4, 2025 in Randalstown, Northern Ireland. Conservation Charity Buglife's recent report into the Bee population in Northern Ireland highlighted that many species in the country are in decline, with 21 species set to become extinct without intervention. Northern Ireland's honey bees are under threat due to the absence of a bee inspectorate since last year, according to the Ulster Beekeepers Association (UBKA). The bee inspector is responsible for supporting bee health, external and addresses diseases such as American foulbrood (AFB) and European foulbrood (EFB) which affect honey bees. Although beekeepers are responsible for reporting diseases within their own colonies, bee inspectors confirm notifiable diseases, contain outbreaks, inspect neighbouring hives, and advise on destroying affected colonies. Honeybees are also facing decline due to habitat loss, climate change, including the effects of extreme weather, parasites and diseases. This Tuesday, May 20th marks International World Bee Day. (Photo by). DM
Daily Express
05-05-2025
- Business
- Daily Express
Banggi holds biogas potential
Published on: Monday, May 05, 2025 Published on: Mon, May 05, 2025 By: Nikko Fabian Text Size: Preliminary assessments indicate Banggi Island's potential to generate over 1.5 GWh of renewable electricity annually by converting palm oil mill effluent and other biomass by-products into biogas. Kota Kinabalu: BIMP-EAGA Business Council (BEBC-Sabah) Chairman Dr. Raymond Alfred revealed its unwavering support for developing biogas energy infrastructure on Banggi Island. He said this strategic initiative aims to bolster sustainable energy security and foster inclusive economic growth in the region. 'Banggi Island, including Kudat and Kota Marudu, boasts a burgeoning oil palm industry, generating substantial biomass waste like POME and EFB…This presents a unique opportunity to transform Banggi into a model for rural renewable energy and agro-industrial development. I am eager to collaborate with Dato Verdon Bahanda, the Member of Parliament for Kudat, on this project,' he added. Preliminary assessments indicate Banggi Island's potential to generate over 1.5 GWh of renewable electricity annually by converting palm oil mill effluent and other biomass by-products into biogas. The clean energy source could power hundreds of rural homes and businesses, significantly reducing reliance on expensive diesel-generated electricity. Raymond further emphasized, 'This initiative aligns perfectly with the BIMP-EAGA Vision 2025, promoting green infrastructure, robust local value chains, and sustainable livelihoods. It's also crucial for Banggi's long-term goal of achieving full district status, with energy self-sufficiency forming a cornerstone of its local governance and development.' The Business Council advocates for: A comprehensive feasibility study involving state agencies, palm oil stakeholders, and renewable energy experts. Strategic public-private partnerships to expedite infrastructure investment. Robust support from national bodies such as SEDA, MPOB, and the Sabah Energy Commission. Raymond highlighted that biogas development transcends mere technological advancement; it represents a transformative opportunity to create green jobs, enhance energy access, and empower local communities in one of Sabah's most remote yet resource-rich areas. 'With the support of the BIMP-EAGA Special Envoy Tan Sri Pandikar Amin, we are committed to establishing Banggi as a pioneering example of rural energy transition—benefiting not only Sabah, but the entire BIMP-EAGA region,' quipped. * Follow us on Instagram and join our Telegram and/or WhatsApp channel(s) for the latest news you don't want to miss. * Do you have access to the Daily Express e-paper and online exclusive news? Check out subscription plans available. Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
