Shares surged as First Resources delivered first-half 2026 results that blew past expectations, raising a pointed question: how much of the good news is already baked into a stock sitting at its 52-week high?
A 57% Profit Jump, Powered by More Trees and Better Margins
First Resources reported 1H2026 sales of US$973.6 million, up from US$673.9 million a year earlier, with net income leaping to US$234.9 million from US$149.2 million.
The strong uplift was underpinned by higher production volumes and improved processing margins.
Production rose broadly across both company-owned and smallholder plantations, with nucleus fresh fruit bunch output up 19.5% and plasma output up 23.2%. That volume growth means the profit surge isn't just a commodity-price story — it reflects real operational scale-up.
A Bigger Dividend Signals Management Confidence — and a Policy Shift The 8 Singapore-cent interim payout is a significant step up. For context, total dividends for all of FY2025 were 14.7 SG cents. The interim alone now exceeds what was paid at the half-year mark a year ago. Management raised its payout policy to up to 60% of underlying net profit starting FY2026, up from 50% previously. For income-focused investors, that policy change matters as much as the headline number — it commits the company to sharing more of its upside.
Indonesia's Land Seizure Campaign Is the Elephant in the Room
President Prabowo has ordered seizure of an additional 4–5 million hectares of illegally controlled palm oil plantations in 2026 , a crackdown that places between 2–5 million tonnes of crude palm oil production at risk, introducing serious supply uncertainties. For First Resources, which operates legally titled estates, this is a double-edged sword: tighter industry supply supports prices, but regulatory unpredictability across Indonesia spooks investors and could slow expansion plans.
The Stock May Be Running Ahead of the Fundamentals At $3.95, the shares have hit the top of their 52-week range of S$1.50 to S$3.95.
The average analyst 12-month target sits at S$3.84 — below today's price. The share price has already moved up very strongly year to date, so part of this good news looks priced in.
Forecasters anticipate firm palm oil prices in the first half of 2026 but expect them to flatten in the second half as Indonesian supply recovers. If commodity prices soften while the stock trades at a premium to consensus targets, shareholders collecting that fatter dividend may need patience — or conviction that the next leg of growth is still ahead.