The group said it intends to pursue strategic investments in the green economy.
PETALING JAYA: Plantation company TSH Resources Bhd
will be undertaking new planting at a steady pace on its unplanted land over the next few years, underpinned by its strong balance sheet.
For the fourth quarter ended Dec 31, 2023 (4Q23), TSH’s net profit dropped by 42.4% year-on-year (y-o-y) to RM25.4mil or earnings per share of 1.84 sen.
Revenue declined by 7.3% y-o-y to RM260.9mil mainly due to a drop in revenue from its palm-products segment, attributable to lower average selling prices of crude palm oil (CPO) and palm kernel (PK) despite a higher volume of CPO sold.
For financial year 2023 (FY23), TSH posted a core pre-tax profit of RM181.4mil against RM257.2mil last year, attributable largely to the 16.1% lower CPO price of RM3,437 per tonne against RM4,100 per tonne a year ago.
Additionally, the TSH-Wilmar joint venture posted a loss in FY23 of RM3mil, resulting in a reversal in contribution of RM34.6mil from their profit contribution of RM31.6mil in FY22.
In line with the decrease in revenue for the quarter, the company said in a filing with Bursa Malaysia that the profit for the palm products segment for 4Q23 and FY23 were lower compared with the corresponding periods last year.
This was due to lower average selling prices of CPO and PK.
For 4Q23, fresh fruit bunch (FFB) production was higher compared with 4Q22, mainly due to higher FFB yield per hectare.
Nevertheless, on a year-to-date basis, TSH reported lower FFB production compared with the corresponding period last year due to dry weather in Indonesia during mid of the year, disposal of estates in the previous financial year and cyclical decline of crop in 2023.
On the other hand, TSH said revenue from its others segment was lower by 36% y-o-y in 4Q23, mainly due to lower revenue contribution from the wood division because of low demand for wood products and cessation of cocoa division in 4Q23.
TSH said its net assets per share and net gearing improved to RM1.48 and 0.02 times, respectively, from RM1.38 and 0.08 times as at the end of last year.
Moreover, the group said it intends to pursue strategic investments in the green economy to further enhance its long-term shareholder value.
“On the back of declining palm oil stock and seasonally lower output of FFB for the first half of the year, CPO price has been trending up since January 2024,” the company said.
“It recently breached the RM3,900 level, supported by the rising demand for biodiesel in Indonesia and the anticipation of flattish palm oil production.
“In view of the general market expectation that average CPO price for 2024 will be at around current level and with receding inflationary pressure, barring any unforeseen circumstances, the group is cautiously optimistic of achieving satisfactory performance for 2024,” the company added.
The company has declared a first and final dividend of 2.5 sen per share for payment on May 17, 2024.
