TSH Resources posts higher revenue, dip in net profit for 3Q14

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KUCHING: TSH Resources Bhd (TSH Resources) posted a set of mixed financial performance for the third quarter of 2014 (3Q14).

The company announced on Bursa Malaysia yesterday that it generated higher revenue for 3Q14 but its net profit dropped year-on-year (y-o-y).

TSH Resources said despite its turnover for 3Q14 increased 12 per cent y-o-y to RM246.95 million, earnings for 3Q14 fell by 71 per cent y-o-y to RM24.28 million.

For the nine months ended September 2014 (9M14), TSH Resources added its revenue rose by 13 per cent y-o-y to RM835.87 million but net profit for 9M14 declined by 7.2 per cent y-o-y to RM111.83 million.

Meanwhile, in its notes, TSH Resources said its palm oil and bio-integration business reported higher fresh fruits bunches (FFB) production growth of 26 per cent y-o-y to 163,646 metric tonnes from 129,778 metric tonnes in 3Q13 attributed to more young plantation areas achieved maturity and higher yield.

The company observed that despite lower average crude palm oil (CPO) price realised of RM2,170 per tonne compared with RM2,239 per tonne in 3Q13, the palm oil segment achieved higher profit of 18 per cent due to higher FFB production and on-going initiatives to improve unit production cost and operational efficiencies.

From January to September, TSH Resources revealed that its FFB production increased by 27 per cent y-o-y to 483,048 metric tonne from 379,673 metric tonnes.

Similarly, over the same period, the company pointed out its CPO production also rose to 263,607 metric tonnes from 224,101 metric tonnes in line with the increase in production capacity of its mills as well as higher crop and palm oil yield.

As for its wood product manufacturing segment, TSH Resources said the segment registered a lower revenue and higher operating loss due to lower export.

From January to September, TSH Resources observed that its wood product manufacturing segment posted a operating loss of RM300,000 compared with RM2 million operating profit over the same period last year.

It explained that the loss was attributed to lower demand from the European market and impairment losses on trade receivable and inventories.

Commenting on the group’s prospects, TSH Resources said, “Following the recent sharp fall in palm oil prices, CPO prices have since rebounded moderately boosted by the increased biodiesel mandate and scrapping of export tax by Malaysian and Indonesia Government.

“The recent dry weather in Indonesia and the off peak production season may also curb supplies and provide support for CPO price.

“In the medium to long term, the CPO will likely find its support from the biofuel programme in Malaysia and Indonesia, as well as the growth in demand of oils and fats which are expected to outstrip the supply of edible oil.

“These will have a significant positive effect on the CPO price.

“TSH Resources remains optimistic on the long term prospect of the palm oil industry and will continue to focus on oil palm planting programme in Indonesia while exploring to expand its plantation land in Malaysia.

“With FFB production expected to increase in 2014, the group can expect to achieve improved profit in the coming quarters,” TSH Resources said.

The company noted that apart from focusing on profit generation and cost optimisation in its operation, the group is also committed to sustainability initiatives and believes in contributing positively towards social and environmental programmes which in the long term, will create businesses sustainability and enhancement in value.