Thursday 28 Mar 2024
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KUALA LUMPUR (Feb 25): TSH Resources Bhd's core profit before tax (PBT) increased by 12% to RM34.7 million in the fourth quarter ended Dec 31, 2015 (4QFY15), from RM30.98 million a year earlier, attributable to the 25% higher production of fresh fruit bunches (FFB) and lower operating expenses.

This was despite lower average crude palm oil (CPO) price which was RM2,007 for 4QFY15, against RM2,165 in 4QFY14, the plantation group told Bursa Malaysia in a filing today.

It recommends a first and final single tier dividend of 2 sen for the financial year ended Dec 31, 2015, subject to shareholders' approval in the forthcoming annual general meeting (AGM).

TSH said its robust cost-controls on operating expenses, coupled with reduction in unit cost of production because of higher output, had helped greatly in improving gross profit margin to 42% for 4QFY15, from 19% a year ago.

The group posted a net loss of RM64.32 million, as compared to a net profit of RM26.94 million a year ago, due to loss of discontinued business amounting to RM138.58 million.

If not for the one-off item of discontinued business that was part of a larger exercise to streamline its operations in Sabah, TSH said it would have recorded a net profit of RM74.2 million.

For the full year (FY15), TSH registered a core PBT of RM113.2 million, derived after adjusting for gain or loss of non-cash and unrealised exchange translation, fair value of biological assets and the one-off item.

It reported a net loss of RM98.99 million in FY15, as compared to RM138.76 million in FY14, due to the same reason.

Moving forward, TSH said it will continue to stay focused on cost and yield management in the coming months in 2016.

"The board is optimistic on the long term prospect of the palm oil industry and will continue to focus on oil palm planting programme in Indonesia and Malaysia. [The] palm products segment which accounts for more than 80% of the revenue and profit for the group, will remain a significant contributor to group profit," it added.

Meanwhile, the group also announced the discontinuation of the non-core business operation under its subsidiary, Eko Pulp & Paper Sdn Bhd (EPP), which engaged in research and development projects to convert oil palm's empty FFB into pulp and paper.

According to TSH, the capital expenditure on EPP were "sunk costs" incurred in earlier years since 2003, with no bearing on the current cash position of the company.

It said with the discontinuation of this non-core business, there will be no further expenditure and cash outflow from the company.

Following this, TSH said it can focus on its core business of oil palm plantations. Its total assets increased by 4.7% and shareholders' fund by RM55.8 million to RM1.37 billion, after the streamlining exercise.

Shares in TSH fell two sen or 1.03% to its one month low of RM1.93 today, bringing its market capitalisation to RM2.67 billion.

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