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RAM Ratings affirms Johor Plantations’ AA1/Stable/P1 ratings
Published on 21 Sep 2026.
RAM Ratings has affirmed Johor Plantations Group Berhad’s (JPG or the Group) AA1/Stable/P1 corporate credit ratings and the corresponding ratings of its Islamic Medium-Term Notes and Islamic Commercial Papers programmes, which have a combined limit of up to RM3.0 bil.
The ratings also incorporate rating uplift from JPG’s standalone credit profile, based on our assessment of a ‘high’ likelihood of extraordinary support from Johor Corporation (JCorp) (rated AAA/stable/P1), JPG’s ultimate holding company and Johor’s state development agency. This assessment reflects JPG’s core role within JCorp’s plantation segment, the strategic and reputational linkages between the entities, and JCorp’s demonstrated oversight of the Group. JPG’s standalone credit profile is anchored by above-industry plantation productivity, a favourable palm age profile and prudent financial management, although these factors are moderated by its mid-sized operating scale relative to larger plantation peers and exposure to volatile crude palm oil (CPO) prices.
JPG delivered an improved operating performance in FY Dec 2025, driven by favourable weather conditions, sufficient labour availability and ongoing mechanisation initiatives. Fresh fruit bunch (FFB) yields rose to 22.8 MT/ha (2024: 22.4 MT/ha) while CPO yields increased to 4.61 MT/ha from 4.49 MT/ha, continuing to outperform industry averages. These metrics continue to support the Group’s cost competitiveness and partly mitigate earnings volatility inherent in the plantation sector.
Stronger CPO and palm kernel prices, together with higher delivery volumes, lifted fiscal 2025 revenue and operating profit before depreciation, interest and tax (OPBDIT) by a respective 13% and 19% y-o-y to RM1.7 bil and RM605.6 mil. Despite the Group’s 5% topline growth in 2Q FY Dec 2026, OPBDIT declined 24% y-o-y to RM204.6 mil, underscoring the sensitivity of earnings to commodity prices and input costs, particularly manuring costs and external FFB purchases.
JPG’s balance sheet remains manageable for its rating level. As at end-June 2026, JPG’s debt level and gearing stayed broadly stable at a respective RM1.6 bil and 0.54 times. Funds from operations debt coverage (FFODC) was steady at 0.34 times last year but moderated to an annualised 0.19 times in 2Q fiscal 2026, reflecting higher operating costs. We expect the Group's earnings to remain resilient over the next two years, supported by healthy CPO prices, higher delivery volumes, continued mechanisation and digitalisation efforts and secured fertiliser supply (for 2026).
Gearing and FFODC are projected to remain manageable at around 0.70 times and 0.20 times, respectively, after accounting for capital expenditure for accelerated replanting activities and the development of Integrated Sustainable Palm Oil Complex (iSPOC) as part of the Group’s downstream expansion.
Analytical contacts
Nur Hadhirah Binti Bahrom
(603) 2708 8207
hadhirah@ram.com.my
Karin Koh, CFA
(603) 2708 8237
karin@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my
The credit rating is not a recommendation to purchase, sell or hold a security, inasmuch as it does not comment on the security’s market price or its suitability for a particular investor, nor does it involve any audit by RAM Ratings. The credit rating also does not reflect the legality and enforceability of financial obligations.
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Similarly, the disclaimers above also apply to RAM Ratings’ credit-related analyses and commentaries, where relevant.
Published by RAM Rating Services Berhad
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