KUALA LUMPUR: Sabah-based TSH Resources Bhd's annual net profit almost doubled to RM114 million from RM58 million a year ago, as it registered higher revenue and booked a foreign exchange gain as opposed to a loss in the prior year.

Annual revenue rose 23% year-on-year to RM1.07 billion from RM872.3 million, according to the group's Bursa Malaysia filing today.

It booked a foreign exchange gain of RM16.75 million in FY17, against a foreign exchange loss of RM17.52 million in FY16.

It proposed a first and final dividend of 2 sen per share for the financial year ended Dec 31, 2017 (FY17). It did not declare any dividends in FY16.

After adjusting for non-cash and unrealised exchange translation gain or loss, its annual core profit before tax for FY17 grew 38% year-on-year to RM179.7 million from RM130.2 million.

In a statement, TSH said the jump in annual core PBT was mainly attributable to a 19% rise in fresh fruit bunches (FFB) production — to 710,105 tonnes in FY17 from 595,821 tonnes in FY16 — and stringent cost controls.

TSH said the rise in FFB production in FY17 was driven by its plantation's growing maturity profile and expanding harvesting area.

In its fourth quarter of FY17 (4QFY17), TSH's net profit came in at RM21.63 million as opposed to a net loss of RM21.77 million in 4QFY16, while revenue grew 10% to RM269.95 million from RM244.3 million on more crude palm oil and palm kernels sold.
 
In terms of core PBT, there was only a marginal y-o-y rise to RM48.7 million from RM48.5 million, said TSH, as FFB production had peaked in the third quarter of this year, as opposed to the fourth quarter of last year.

TSH said its oil palm plantations have continued to show steady recovery following the poor harvest in 2016 caused by the hot and dry El Nino phenomenon.

In line with this trend, the group expects to sustain its FFB production growth in 2018 and onwards, aided by oil palm trees with higher yielding ages, in view of the increasing maturity of the trees.

This expectation is buoyed by good weather conditions recorded by TSH's plantations in Malaysia and Indonesia throughout 2017, which would have a favourable effect on FFB production in subsequent years, said TSH.

“Improving FFB output coupled with cost-control, will continue to lower unit cost of production and raise profitability insofar as CPO price can maintain at the current level. We remain confident that the performance of TSH will remain positive for year 2018,” said TSH’s group chairman Kelvin Tan.