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AEP Plantations PLC on Monday said it remains confident of meeting market expectations this year, supported by the recently completed Pinago acquisition. The operator of sustainable palm-oil plantations in Indonesia and Malaysia, said own fresh fruit bunch production fell 2.7% year-on-year to 421,900 metric tonnes in the five months ended May 31, while crude palm oil production declined 1.8% to 173,200 tonnes. External FFB purchases rose 6.5% to 524,000 tonnes, helped by the inclusion of the recently acquired Pinago Group. AEP announced the acquisition of 98% of Indonesian agribusiness PT Pinago Utama Tbk for around $162 million in May, a deal the firm said will be immediately earnings-enhancing and increase crude palm oil production by 25%. Own FFB production was hurt by lower yields in North Sumatra and Riau, where a replanting programme on ageing palms and the suspension of fertiliser application in replanting areas reduced output. Parts of North Sumatra also experienced a delayed cropping cycle, with these impacts partially offset by stronger production in Kalimantan and the inclusion of one month of output from Pinago. The external FFB increase was driven mainly by a 4.7% increase across ’other regions’, which more than offset a 2.4% decline in North Sumatra, AEP said. The average crude palm oil ex-mill price slipped 2.2% to $859 per tonne, while palm kernel prices rose 8.1% to $802 per tonne. AEP said construction of its 9th mill in Kalimantan remains on track for commissioning in December, while a planned initial public offering of its Kalimantan subsidiary remains targeted for the fourth quarter of 2026. It remains confident of meeting market expectations this year, supported by the Pinago acquisition. ‘As we look to the future, we are on track with our significant replanting programme, have an active pipeline of selectively identified brownfield assets in Indonesia and a strong balance sheet that provides full flexibility for continued growth, all of which is supported by the long-term demand fundamentals of CPO,’ said Chief Executive Kevin Wong Tack Wee. The CEO noted that, whilst there is some uncertainty surrounding the recent Indonesian export framework, the impact to AEP’s business is expected to be minimal. Palm oil prices are expected to remain supported by stronger domestic demand from the B50 biodiesel programme and potential supply disruptions associated with El Nino, the CEO added. AEP noted that since the Indonesian government’s May announcement to centralise strategic commodity exports under PT Danantara Sumberdaya Indonesia, subsequent statements and a phased transition period have provided greater clarity. ‘Exporters may continue direct overseas sales during the transition while meeting new reporting requirements to DSI, with full implementation expected from 1 January 2027. It is reported that DSI will serve as an intermediary facilitating and overseeing exports rather than acting as a trader; and that its mandate is to strengthen data-based supervision, not disrupt normal trading activities,’ AEP said. Shares in AEP traded up 3.0% at 1,694.00 pence each in London on Monday morning. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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