The company recorded revenue of RM753.9 million, a 15 per cent lower as compared to RM887.1 million in previous financial year.
KUCHING: The financial year 2015 saw Subur Tiasa Holdings Bhd (Subur Tiasa) facing challenges as the prolonged recovery process from the global financial crisis was still saddled with unfinished post-crisis adjustments.
Nevertheless, the company recorded revenue of RM753.9 million, a 15 per cent lower as compared to RM887.1 million in previous financial year.
This was mainly attributed to the lower export logs sales volume and average selling price of crude palm oil (CPO), said Tiong Kiong King, chairman for the group in Subur Tiasa’s Annual Report 2015.
Profit before tax was RM2.4 million while profit after tax was RM2.6 million, translating to earnings per share of 1.4 sen. Net assets per share stood at RM3.58 per share as at end of financial year ended July 31, 2015.
Touching on the specifics, the logging and reforestation segment contributed to 38 per cent of the total group’s revenue, with India remaining as the company’s major export destination followed by Taiwan, Vietnam and China.
Firm market demand coupled with the tightening of logs supply and strong dollar against ringgit have pushed up the average export logs selling price during the year.
On the manufacturing front, the manufacturing of plywood, particleboard, sawn timber and briquette charcoal, continued to be the key contributor, accountable for 56 per cent of the group’s revenue.
On its plantation side, Tiong noted that fresh fruit bunch (FFB) revenue contributed six per cent of the total revenue of the group during FY15.
“The oil palm segment was impacted by the sharp decline of CPO price by 13 per cent from average of RM2,531 per metric ton (MT) in FY14 to average of RM2,200 per MT. CPO price was generally on the downtrend since January 2015 before trending slightly higher in May 2015,” he said.
As at July 31, 2015, the group’s planted areas increased by 13 per cent to 10,300 hectares spreading over a total land bank of 26,800 hectares. The Group’s FFB production increased by four per cent to 109,519MT from 104,949MT in previous year, in line with more crops going into prime age maturity profile.
Looking ahead, global growth for 2015 is projected at 3.1 per cent, lower than in 2014 according to IMF in October 2015.
“Nevertheless, the Ministry of Finance expects the Malaysian economy to sustain its positive growth trajectory and expand by four per cent to five per cent in 2016,” enthused the chairman.
“The strong dollar against the ringgit favours our export sales which are predominantly in US Dollar and hence will be beneficial to the group.”
Prices for logs and timber products are expected to remain firm in anticipation of tight supply of logs and robust demand from importing countries. The oil palm segment’s performance would continue to be driven by the CPO price movement which is correlated to the world edible oil and related markets.
“While our palm trees have entered into prime age profile with improving yield per hectare, we expect to see an upward trend in the profit contribution from the oil palm segment in the wake of CPO price recovery in the long run,” he added.
The group will continue to focus on improving the existing business segments while diversifying into other business segments in order to deliver sustainable profitability and value creation.