KUALA LUMPUR (May 8): TH Plantations Bhd announced today that it has failed to meet its headline Key Performance Indicators (KPIs) for the financial year ended Dec 31, 2014 (FY14) on the back of business environment uncertainties and weaker commodity prices.

TH Plantations (fundamental: 0.5; valuation: 0.8) said it achieved a fresh fruit bunch (FFB) yield of 20.52 tonner per ha in FY14, falling short of the 22.40 tonne per ha target mainly due to abnormal weather conditions that affected the FFB production. 

The target of a 6.0% return on equity (ROE) for FY14 was also not achieved, as it posted a ROE of 4.02% on the back of business environment uncertainties and weaker commodity prices, it said in a filing with Bursa Malaysia today. 

And while the group declared a first and final dividend per share of 2 sen for FY14, translating into a net payout of 37% of the group’s net profit, it fell short of the target of distributing 50% of net profit.
 
"However, amid the current challenges, TH Plantations will remain focus to deliver value for shareholders and enhance our business operation to ensure growth and sustainability," it said. 

For FY15, the group is targeting to achieve a ROE of 5.5% and FFB yield of 21.15 tonnes per ha. It also aims to distribute approximately 50% of its net profit as dividend. 

For its medium term headline KPIs from FY13 to FY15, TH Plantations has undertook new and strategic land bank expansions of an additional 30,000ha to strengthen its position as a medium size plantation company.

"As at todate, we have achieved 60% of the targeted land bank expansions via the acquisitions of oil palm plantation in Sarawak, Malaysia and Kalimantan in Indonesia," it said. 

Shares in TH Plantations closed 1 sen or 0.64% lower at RM1.55 today, for a market capitalisation of RM1.38 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.)