News Column

TSH Resources nets record profit

February 25, 2014



KUALA LUMPUR: SABAH-based TSH Resources Bhd has registered a record net profit of RM224.6 million for the financial year ended December 31 2013, a 132 per cent higher than the RM97 million net profit in the previous year, on the back of strong growth in fresh fruit bunches (FFB) production and reduction in production costs.

In a statement yesterday, the plantation company said the net profit was contributed by a core net profit of RM139.3 million and investment disposal gain of RM85.3 million in the face of lower crude palm oil (CPO) prices recorded during the year.

In line with the lower production costs realised by TSH through better efficiency, the gross profit margin escalated to 30.6 per cent in 2013 from 25.5 per cent in the previous year.

The gross profit margin improved despite a 15 per cent lower average CPO price of RM2,251 in the year under review compared with RM2,650 in 2012. The effective reduction in unit production cost has been very significant over the last one year.

"Since 2008, TSH's FFB production has been growing on average at 34.4 per cent per annum. With cash from the disposal of non-core investment in Pontian United Plantation Bhd, we have a stronger platform to accelerate our new oil palm planting and acquisition of primarily greenfield plantations," said its chairman, Datuk Kelvin Tan.

He added that almost 80 per cent of TSH's oil palm trees are now immature and young, which will continue to fuel FFB production growth.

"Coupled with our ongoing new planting, the company believes that it can sustain double-digit growth in FFB production for the next five to seven years," he said, adding that TSH expects unit production cost to continuously undergo downtrend as its FFB yield increases for the next few years.

For the fourth quarter ended December 31 2013, the core net profit of TSH jumped by 53 per cent to RM50 million compared with RM32.7 million in the previous quarter.

The core net profit is calculated after excluding non-operating items such as currency translation difference.

TSH has also announced a proposed first and final single-tier dividend of 3.5 sen per share for the year under review.


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Source: Business Times (Malaysia)


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