Ta Ann sees growing net profit in 4Q, expects similar FY15

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KUCHING: Ta Ann Holdings Bhd (Ta Ann) reported a fourth quarter financial year 2014 (4QFY14) core net profit of RM20.5 million, bringing total for the year to RM105.5 million with management expecting FY15 forecasts to be similar given the lacklustre plywood prices.

AmResearch Sdn Bhd (AmResearch) yesterday noted that no final dividend was proposed after it had earlier declared interim dividends totalling 20 sen per share. All the operating segments for FY14 performed largely in line with estimates.

“As expected, the plywood division turned in a core pre-tax loss of RM5.6 million against our projected loss of RM5.8 million,” it said in a note on the group after it posted its results.

“This was an improvement from FY13’s loss of circa RM40 million. Management had attributed this to the sale of higher premium plywood to the Australia market.

“It has also reduced the production of veneer in Tasmania pursuant to a cut in supply of logs from Tasmania Forestry. Notwithstanding this, we maintain our plywood division loss at RM15 million per annum over the next few years.”

Included in the plywood PBT of RM11.4 million for FY14 was a RM17 million gain – the second and last tranche compensation from the Australian government pursuant to a wood supply reduction agreement.

Encouragingly, the logs division has been able to sustain its strong performance due to continued demand from India.

“Our FFB output assumption is maintained at 680,000 tonnes versus management guidance of 650,000 tonnes.

“We also maintain our FY15F CPO price assumption at RM2,400 per tonne. Upside risks stemming from the weaker ringgit (in view of timber products being sold in USD) could be mitigated by lower-than-expected CPO prices,” added AmResearch.