KUALA LUMPUR (May 27): Ta Ann Holdings Bhd saw its net profit for the first quarter ended March 31, 2015 (1QFY15) decline 5.5% to RM27.08 million or 7.31 sen per share from RM28.66 million or 7.74 sen in 1QFY14, on weaker crude palm oil (CPO) and fresh fruit bunches (FFB) prices.

Its revenue for the quarter came in at RM222.15 million, 4.9% lower compared from RM211.82 million in 1QFY14.

Ta Ann (fundamental: 1.9; valuation: 2) also declared a first interim single tier dividend of 10 sen per share, in respect to the financial year ending Dec 31, 2015, payable on August 17.

In a filing with Bursa Malaysia today, the integrated timber producer said compared to the corresponding quarter in 2014, average FFB and CPO prices were lower by 16% and 13%, respectively.

Ta Ann said its timber sector saw lower sales volume, but better average selling prices for plywood (up 6%) and export logs (up 16%), which generated a higher profit margin and profit for the sector.

Going forward, Ta Ann said demand for timber and timber products are expected to be sustained in the second quarter of 2015.

"Log supply has remained tight, which is anticipated to maintain timber and timber products’ selling prices.

"Higher FFB and CPO production are expected in the second and third quarters as FFB production showed a rising trend," it added.

Barring unforeseen circumstances, Ta Ann expects satisfactory performance for both its timber and palm oil sectors.

Ta Ann closed unchanged at RM3.78, with a market capitalisation of RM1.4 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)