[RAM] RAM Ratings affirms Johor Plantations' AA1/P1 ratings, outlook stable

RAM Ratings has affirmed Johor Plantations Group Berhad’s (JPG or the Group) AA₁/Stable/P1 corporate credit ratings and the same ratings of its Islamic Medium-Term Notes and Islamic Commercial Papers programmes, with a combined limit of up to RM3.0 bil.

The ratings reflect an uplift from JPG’s strong strategic and operational alignment with Johor Corporation (JCorp) – its ultimate holding company and Johor’s state development agency – which supports our view that extraordinary financial support from JCorp is highly likely if required. On a standalone basis, we view JPG’s business position as strong, anchored by solid productivity metrics and a favourable palm age profile, though constrained by the Group’s scale as a mid-sized planter. Disciplined financial management has kept JPG’s financial profile healthy. The Group’s debt protection metrics are strong while gearing is moderate, providing sufficient headroom to fund planned capital expenditure (capex) for the next two years, estimated at RM1.2 bil. 

In FY Dec 2024, JPG’s palm oil production and yields improved on the back of favourable weather, adequate labour supply and enhanced mechanisation. These factors, combined with firmer crude palm oil and palm kernel prices, pushed revenue and operating profit before depreciation, interest and tax (OPBDIT) up 22% and 38% y-o-y, respectively, with OPBDIT margin growing to 33% (FY Dec 2023: 29%). This trend extended into 3M FY Dec 2025, seeing revenue climb 15.4% y-o-y.

As at end-March 2025, JPG’s gearing eased to 0.51 times, supported by increased share capital from its July 2024 initial public offering (IPO) and partial debt repayment with IPO proceeds. Annualised funds from operations debt coverage (FFODC) strengthened to 0.30 times, underpinned by better earnings and easing cost pressures. JPG remains in a capital-intensive phase, with total capex – including the development of an integrated sustainable palm oil complex and replanting – expected to be funded via earmarked IPO proceeds, internal cashflows and sukuk issuance. Our sensitivity analysis indicates that JPG’s gearing and FFODC will stay supportive of its current ratings, averaging a respective 0.70 times and 0.23 times over the next two years. 


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L Nurisya Abdullah
(603) 2708 8238
nurisya@ram.com.my

Thong Mun Wai
(603) 2708 8255
munwai@ram.com.my

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