KUALA LUMPUR (Nov 28): Timber products and plantation player Ta Ann Holdings Bhd's net profit for the third quarter ended Sept 30, 2017 (3QFY17) fell 56% year-on-year to RM23.09 million from RM52.06 million, on lower exports of plywood products and logs.

Quarterly revenue fell 12% y-o-y to RM308.17 million from RM349.88 million, its Bursa Malaysia filing today showed.

"Plywood product and export logs sales volume dropped by 37% and 55% respectively, [which] accounted mainly for the decrease in revenue and profit," said Ta Ann.

Nevertheless, net profit in the first nine months of FY17 (9MFY17) rose 11% y-o-y to RM95.81 million from RM93.62 million, as revenue gained 5% to RM880.1 million from RM837.5 million.

Ta Ann said crude palm oil (CPO) and fresh fruit bunches (FFB) achieved higher sales volumes of 11% and 13% respectively, in the cumulative period. Average CPO selling price was 14% higher, while average FFB selling price was 11% higher, it added, which contributed to the better 9MFY17 performance.

Looking forward, Ta Ann said performance for the palm oil sector is expected to remain the group's main profit contributor in the coming quarter.

As for its timber sector, Ta Ann said the underperformance is due to low logs production to comply with a certification exercise, as well as the 20% logs export quota that took effect in July this year.

"The group has nevertheless strategised in employing higher plantation and certified woods components in its production by utilising matured plantation logs as well as the imported eucalyptus veneer and also adjusting market mix in accordance to the availability of the raw material," it said.

"Given the low plywood inventory in Japan coupled with the infrastructure construction works for the coming Olympics which has accepted the company's plywood products for the said construction works, we expect the timber market to rebound," it added.

As such, it is confident FY17 will record a satisfactory performance.

The company's shares slid 4 sen or 1.11% to close at RM3.56 today, for a market capitalisation of RM1.58 billion.