AEP Plantations Reports Strong Operational Growth and Soaring Palm Kernel Prices in 2025 Trading Update

AEP Plantations’ 2025 trading update: production up, prices firm, and PK prices soar

AEP Plantations Plc has posted a solid set of operational numbers for the year to 31 December 2025, with growth across fresh fruit bunches (FFB), crude palm oil (CPO) and palm kernel (PK). The headline: volumes are up, prices are supportive, and a new mill is on schedule. For a palm-focused producer in Indonesia and Malaysia, that is a tidy combination.

Before we dive in, a quick glossary refresher. FFB are the oil palm bunches you harvest. CPO is the main product milled from those bunches. PK are the kernels inside, a by-product with its own market. “Ex-mill” price is what AEP realises at the mill gate, before downstream costs.

Stronger output and a pricing tailwind

Own-crop FFB rose 6% in 2025, supported by better yields from young and matured palms in Bengkulu and Kalimantan. Bought-in FFB jumped 18% as new third-party crop intake ramped at the recently commissioned HPP Mill in North Sumatra and in Bengkulu. That pushed CPO production up 7% and PK production up 13%.

Pricing did its bit too. Average CPO ex-mill was $853 per tonne, up 7% year-on-year, while PK prices surged 44% to $731 per tonne. Management also notes pricing showed resilience in January 2026, which is encouraging for the near term.

Metric	2025	2024	Variance
Own FFB production (‘000 mt)	1,080.6	1,019.9	+6%
External FFB purchased (‘000 mt)	1,170.1	988.9	+18%
CPO production (‘000 mt)	425.8	396.7	+7%
PK production (‘000 mt)	105.9	93.4	+13%
Average CPO ex-mill price ($/mt)	853	794	+7%
Average PK ex-mill price ($/mt)	731	507	+44%

Why the PK price jump matters

PK is the by-product of milling, so when its price climbs 44%, it can give group margins a useful lift without needing extra investment. The higher PK price also offsets some cost pressures elsewhere. AEP does not disclose unit costs in this update, but all else equal, the PK surge is helpful to cash generation.

Estate development: replanting at pace to lift long-term yields

AEP planted over 221 hectares of new area and replanted 2,440 hectares in 2025, in line with its five-year 10,000 hectare target to sustain productivity and yield improvement. Replanting is often the biggest single driver of future yield gains in palm – younger, high-quality material and tighter agronomy usually mean more fruit per hectare over time.

Management’s message is clear. As Executive Director Marcus Chan puts it, the goal is to lift yields “through improved agronomic practices and tighter estate management, including the use of enhanced monitoring systems”. That, combined with supportive prices in 2025, has underpinned “good cash flow”.

New KAP Estate mill build on schedule for December 2026

The Group’s eighth mill at KAP Estate, Central Kalimantan, is progressing well and remains on track for completion in December 2026. Earthworks are done. Civil, structural and fabrication works are underway. Mechanical equipment is due to arrive in June 2026, and housing and support facilities are slated for progressive completion by November 2026.

Why mills matter: locating processing capacity close to estates typically reduces haulage costs and fruit losses, and can enable more third-party intake. AEP has not disclosed the mill’s capacity or financial impact, but the schedule discipline is a positive signal.

Weather event contained: flooding impact not material

Flooding in late November 2025 affected the PT Cahaya Pelita Andhika estate in Central Tapanuli, North Sumatra. Operations have largely returned to normal, and AEP says the event will not have a material impact on overall fruit production or financial performance. Good to have that risk addressed up front.

M&A in Central Kalimantan: modest bolt-on progressing

As previously announced, AEP has a conditional agreement to acquire Admiral Potential Sdn Bhd, which owns PT Jaya Jadi Utama in Central Kalimantan, for Rp150 billion (approximately USD 9.0 million). Completion remains subject to due diligence and conditions precedent. No further terms are disclosed, and AEP will update the market on completion.

The strategic fit looks straightforward – it deepens the footprint in an existing operating region. Scale and contribution have not been disclosed, so treat it as a modest bolt-on until more detail arrives.

What this means for AEP shareholders

• Operational momentum – Volume growth across own and purchased FFB drove higher CPO and PK output. That is the core engine of earnings in a plantation business.
• Pricing tailwind – CPO up 7% and PK up 44% underpin stronger realised prices, with early 2026 resilience noted.
• Long-term foundations – Replanting and new planting support future yields, and the KAP Estate mill adds processing capacity from late 2026 if the timetable holds.
• Balanced risk management – The flooding impact was contained and flagged as not material, reducing near-term uncertainty.
• Potential inorganic growth – The Central Kalimantan acquisition could add land and optionality, subject to due diligence.

Key numbers and milestones at a glance

Item	Detail
Own FFB	1,080.6k mt in 2025, up 6%
External FFB	1,170.1k mt in 2025, up 18%
CPO production	425.8k mt, up 7%
PK production	105.9k mt, up 13%
Average CPO price	$853/mt, up 7%
Average PK price	$731/mt, up 44%
New planting	Over 221 hectares in 2025
Replanting	2,440 hectares in 2025
KAP Estate mill	Completion targeted December 2026; mechanical equipment due June 2026
Proposed acquisition	Admiral Potential Sdn Bhd (PT Jaya Jadi Utama) for Rp150 billion (approximately USD 9.0 million), subject to conditions

Risks and what to watch next

• Commodity prices – CPO and PK prices drive cash flow. AEP notes resilience into January 2026, but prices can be volatile.
• Project delivery – The new KAP Estate mill is on schedule. Watch for on-time equipment delivery in June 2026 and commissioning by December 2026.
• M&A completion – The Central Kalimantan deal is conditional. Look for due diligence outcomes and any disclosed metrics at completion.
• Weather and operations – Flooding was non-material this time. Continued estate discipline and monitoring systems are important mitigants.

Upcoming catalyst: full-year results by end of April 2026

AEP plans to announce full-year results for 2025 by the end of April 2026. That will be the moment to see how these operational gains, and the stronger PK price, translate into earnings and cash flow. For now, the operational update reads positively, with growth, pricing support, and disciplined execution all pointing in the right direction.