Timber and oil palm boost Ta Ann profit

Ta Ann Holdings Bhd mill.

KUCHING: A strong performance by both the timber and oil palm business has bolstered Ta Ann Holdings Bhd’s earnings last year.

For the financial year ended Dec 31, 2014 (FY14), Ta Ann group’s net profit soared by 34% to RM124.5mil from RM92.8mil in FY13 in line with a 33% growth in revenue to RM1.02bil from RM770mil. Earnings per share rose to 33 sen from 25 sen.

Revenue from timber products segment climbed to RM589.3mil from RM491mil in 2013 while that of oil palm segment shot up to RM431.4mil from RM278.2mil.

The Sibu-based company attributed the impressive results to a 19% jump in export logs sales volume and 16% rise in the logs’ average selling price, a 7% and 6% increase in plywood sales volume and average selling prices respectively while the sales volume of crude palm oil (CPO) rose by 63%. Besides, the sale volume and average selling price of fresh fruit bunches (FFBs) both improved by 6%.

In the latest fourth quarter to Dec 31, the group’s net profit, however,s lipped to RM20.5mil from RM33.3mil a year ago despite higher revenue of RM278.5mil from RM202.9mil.

Explaining why profits had dropped, Ta Ann said: “There was a tax expense of RM8.56mil for the current quarter whereas in the corresponding quarter of 2013, there was a net reversal of tax provision amounting to RM10.5mil.”

Ta Ann is upbeat about the timber market, anticipating the uptrend to be maintained this year with sustained demand for logs from India and plywood products from Japan.

“The log supply shortage will be expected to maintain the timber products’ selling prices. Log supply for the group will be boosted by the commencement of sustainable harvesting of acacia (species) from our planted forests,” it said.

“Products made from the planted forest timber are popular with the buyers.

“The use of only logs from legal source, as verified by an international verifying body, and PEFC certifed timber as input material for our manufactured products have created competitive advantage for the group in the market. The additional new log source from sustainable planted forests will be an added edge,” it added.

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