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Friday, 25 Aug, 2017

TSH bottom line doubles in Q2

The benchmark palm oil contract for November delivery on the Bursa Malaysia Derivatives Exchange was up 1.4 percent at 2,777 ringgit ($649.14) by the close, registering its strongest daily gain in more than two weeks

PETALING JAYA: Plantation outfit TSH Resources Bhd doubled its bottom line in the second quarter ended June 30 to RM27.7mil on a year-on-year (y-o-y) basis from RM13.84mil a year earlier.

In a filing with Bursa Malaysia, the company said the significant increase in net profit was made possible on higher output of fresh fruit bunches (FFB), a lower unit cost of production and better crude palm oil (CPO) selling prices.

TSH’s revenue for the quarter also rose by about 21.54% y-o-y to RM258.23mil from RM212.47mil in the previous corresponding quarter.

According to TSH, the relatively young trees in its plantations are regaining production growth this year.

“The FFB production growth was strong at 51% for the second quarter of 2017 from the same quarter in the previous year. The yield per hectare is expected to strengthen in the second half of this year.

“The company expects the overall FFB production to continue on a growth path, as more oil palm trees are approaching optimum production yield. TSH’s unit cost of production may benefit from the improving FFB yield and trend downwards.

“The declining unit cost of production should augur well for the company’s longer-term profitability,” it said in a separate statement.

However, with regard to TSH’s net profit for the first half of financial year 2017 (FY17), it declined by nearly 10% y-o-y to RM61.65mil, albeit a stronger topline.

This was largely attributed to higher tax-related expenses and lower foreign-exchange gains.

The plantation company’s revenue for the first six months of FY17 increased by 31.82% y-o-y to RM546.73mil, following higher average CPO prices and an increase in FFB production.

TSH expects improvements in its palm oil yields and production volume for the rest of the year.

“The board of directors is optimistic on the long-term prospect of the palm oil industry due to the higher per capita income, the many health qualities of palm oil, and population growth, which will drive greater demand.”

It said the palm products segment, which accounted for about 85% of revenue and profit, would remain a significant contributor to the group.

“The management will continue with its focus on productivity and efficiency improvement to reduce unit cost of production in 2017,” noted TSH in its filing with the bourse.

The company did not declare any dividend in the second quarter. Earnings per share stood at 2.04 sen.

Source : The Star



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