KUCHING: Firmer log and plywood prices have bolstered Jaya Tiasa Holdings Bhd’s profits.
The timber/plantation company said the group’s average selling price of logs and plywood jumped by 17% and 12% respectively in the first quarter to Sept 30, 2013 compared to a year ago.
This helped to drive group pre-tax profit higher by RM7.8mil or 42% to RM26mil from RM18.2mil despite a RM28.8mil drop in group revenue to RM245.5mil due to sharply lower sales volume of logs and plywood as well lower sales price of fresh fruit bunches (FFBs) and crude palm oil (CPO).
In the quarter under review, the logs segment’s pre-tax profit soared to RM15.9mil from RM1.9mil previously although revenue dipped to RM73.1mil from RM87.4mil.
The wood processing segment, including plywood products, registered an impressive pre-tax profit of RM11.4mil against the loss of RM1.4mil previously.
The sales volume of logs and plywood shrank by 29% and 15% respectively, according to Jaya Tiasa’s latest quarterly results.
India remains Jaya Tiasa’s largest log export market, accounting for 62% of the group’s total export sales in US dollar in the last financial year ended June 30, 2013. The group’s key plywood markets are Taiwan, South Korea, China and Japan.
Jaya Tiasa group has forest concessions covering more than 713,200ha, and its monthly log extraction quota is around 94,500 cu m.
In the latest July-Sept quarter, Jaya Tiasa group pre-tax profit from oil palm operations nosedived to RM9.6mil, down from RM23.9mil in the same quarter last year on the back of lower revenue of RM77.8mil against RM88.9mil previously.
The performance of the oil palm segment had been affected by a 22% and 27% decline in the average selling prices of FFBs and CPO respectively .
Going forward, Jaya Tiasa expects the demand and average selling prices of timber products to be sustained in view of the general improvement in next year’s global economic outlook.
High demand for wood products was anticipated from Japan as the country prepared to host the 2020 Olympic Games, it added.
“The Malaysian government’s effort to increase the biodiesel blend from B5 to B7 and the ambition of the Indonesian government to increase usage of CPO in biodiesel will provide stability to the CPO prices and positive outlook for the oil palm segment,” said Jaya Tiasa.
Indonesia and Malaysia are the world’s top producers of CPO.