KUALA LUMPUR (Aug 26): TH Plantations Bhd has returned to the black, posting a net profit of RM8.16 million for the second quarter ended June 30, 2020 (2QFY20).

This compares with a net loss of RM11.53 million for the preceding quarter (1QFY20) and a net loss of RM19.15 million a year ago (2QFY19).

The group posted revenue of RM127.57 million for the quarter, up 10.4% from RM115.55 million in the preceding quarter. Year-on-year, its revenue grew 20.2% from RM106.11 million in 2QFY19.

In a statement, TH Plantation attributed the improvement in performance to a better average crude palm oil (CPO) price of RM2,236 per tonne during the quarter, against RM1,905 a year earlier.

The higher price was supported by the higher biodiesel mandate in Indonesia from B20 to B30 for 2020 and the low production season, as well as restocking of CPO by India and China, the group added.

TH Plantation also recorded a fair value gain on biological assets of RM23.15 million.

Fresh fruit bunches production grew 5.9% during the quarter, while CPO output and sales increased 0.86% and 0.62% respectively year-on-year.

Palm kernel output and sales also increased by 3% and 3.1% respectively year-on-year.

For the first half of its financial year, TH Plantations posted a net loss of RM3.37 million, a significant improvement from a net loss of RM27.24 million a year earlier, while revenue rose to RM243.12 million from RM221.4 million.

The group said its overall financial performance for the year will depend on the movement in prices of palm products and the progress of its strategic recovery plan.

“The group is also facing challenges due to the shortage of foreign labour in the Malaysian palm oil industry resulting from international travel restrictions that were implemented to prevent the spread of COVID-19.

“In addition, the Government recently announced that all industries including plantation are prohibited from hiring new foreign workers until the end of the year. As such, the group is actively monitoring and managing our operations to minimise any impact that may arise from COVID-19,” said TH Plantation.

The group’s share price rose one sen or 3.03% to close at 34 sen, giving it a market capitalisation of RM300.51 million.

Edited by S Kanagaraju