PETALING JAYA: CIMB Research is bullish on SD Guthrie Bhd
’s refinancing of its perpetual sukuk with a sustainability-linked sukuk at a lower cost, as it says this could boost the plantation company’s financial year 2026 (FY26) net profit.
The research house added that it views positively SD Guthrie’s move to refinance its perpetual sukuk with a sustainability-linked sukuk at a lower cost of 3.8% to 3.97% versus 5.65% currently, which could lift FY26 net profit by 2.3% or RM42mil on a full-year basis.
SD Guthrie said the refinancing is expected to generate annual interest savings of approximately RM42mil.
As of Dec 31, 2024, SD Guthrie’s total borrowings stood at RM5.1bil (excluding perpetual sukuk), with 9% fixed and the rest floating.
“A 0.5% change in rates would affect FY24 net profit by RM17.6mil, implying upside should global and Malaysian interest rates decline,” said the research house.
“We maintain our ‘buy’ call and sum-of-parts or SOP-based target price of RM6.01 per share for the company.”
SD Guthrie announced that its RM2.1bil sustainability-linked sukuk was fully subscribed by an enthusiastic market.
The issuance comprises an RM700mil 10-year tranche priced at 3.8% and an RM1.4bil 15-year tranche priced at 3.97%.
The sukuk was successfully priced following a book-building exercise on Oct 27, 2025, which saw peak demand reaching twice the initial target of RM1.5bil.
To accommodate the strong investor demand, the deal was upsized to RM2.1bil, allowing for broader participation.
This marks the company’s maiden sustainability-linked sukuk, the plantation industry’s largest Malaysian ringgit issuance, and Malaysia’s largest sustainability-linked sukuk to date.
The issuance forms part of the group’s RM5bil Islamic notes programme lodged with the Securities Commission on Sept 19.
Additionally, proceeds from the RM2.1bil sukuk will be utilised to meet the group’s near-term funding needs, including the redemption of its RM2.2bil perpetual sukuk due in March 2026 that currently carries an interest rate of 5.65%.
Furthermore, the sukuk incorporates specific sustainability performance targets, including reducing Scope 1 and 2 greenhouse gas emissions by 30% across the group’s global upstream plantation operations and maintaining 100% Roundtable on Sustainable Palm Oil certification.
For the third quarter of the financial year 2025 (3Q25) and the nine months ended Sept 30, 2025, SD Guthrie successfully surpassed the RM2bil mark for its 9M25 net profit, which reached RM2.01bil.
This represented a strong annual 44.2% year-on-year (y-o-y) surge, driven by a 5.6% increase in revenue to RM15.4bil.
On top of that, for 3Q25, the net profit also climbed 22.1% y-o-y to RM935mil, on a 2.7% growth in turnover to RM5.41bil.
