KUALA LUMPUR (Feb 24): Sabah-based oil palm plantation company TSH Resources Bhd saw its net profit fall 16.9% to RM125.5 million for its financial year ended Dec 31, 2014 (FY14), from RM150.96 million a year ago, on higher other operating expenses and taxation.

This translated to earnings per share of 9.33 sen for FY14, compared to 11.58 sen previously.

Its full FY14’s revenue however, improved 6.1% to RM1.08 billion, from RM1.02 billion the previous year, its filing to Bursa Malaysia today showed.

TSH (fundamental: 0.95; valuation: 0.3) said in a statement that core profit before tax increased 25% to RM180.7 million for FY14, after adjusting for non-cash and unrealized exchange translation and one-off disposal of investment.

TSH also proposed a first and final single tier dividend of 2.5 sen per share for FY14, amounting to a payout of RM33.6 million, subject to shareholders’ approval.

Meanwhile, net profit for the final quarter of FY14 ended Dec 31, 2014 (4QFY14) declined 55.24% to RM13.66 million, compared to RM30.52 million in 4QFY13.

Revenue for 4QFY14 also fell 12.07% to RM244.04 million, compared to RM277.53 million in 4QFY13.

Earnings for the quarter under review were lower due to foreign exchange losses, lower crude palm oil price of RM2,165 during the quarter (as opposed to RM2,392 in 4QFY13), and lower fresh fruit bunches (FFB) production due to the severe weather conditions in Indonesia, the company said in a press statement.  

FFB production rose 18% in FY14. Chairman Datuk Kelvin Tan said the FFB production upsurge came from an overall improvement in yield of TSH’s oil palm plantations.

“Our fully matured plantations are able to achieve an average yield of 30 metric ton per hectare. Our remaining 75% of plantation trees which are still immature and young matured, will improve in yield per ha and propel a double digit FFB production growth for the next few years”, he said.

Going forward, TSH said it remains “optimistic” on the long term prospects of the palm oil industry and will continue to focus on its oil palm planting programme in Indonesia, while it further expands its plantation land in Malaysia.

While FFB production can be expected to increase in 2015, TSH said it is nonetheless mindful of the longer term impact of unfavourable weather on FFB yield in 2015.

"However the palm products segment, which accounts for more than 90% of the revenue and profit for the group, will remain a significant contributor to group profit," it added.

TSH closed at RM2.25 today, down 1 sen or 0.44%, giving it a market capitalisation of RM3.05 billion.