KUALA LUMPUR (Nov 18): TSH Resources Bhd reported a 71% drop in third quarter net profit from a year earlier, mainly due to recognition of an investment disposal gain in the previous corresponding quarter.
Plantation firm TSH's filing with Bursa Malaysia showed net profit dropped to RM24.28 million for the third quarter ended September 30, 2014 (3QFY14) from RM83.27 million in 3Q13 when it made an investment disposal gain of RM85.3 million.
"However, excluding the profit on disposal of investment of RM85.3 million in 3Q13 and foreign exchange losses of RM43.7 million and RM6.5 million in 3Q13 and 3Q14 respectively, the core operating profit for this quarter rose to RM40.1 million from RM34.5 million of the corresponding quarter in the previous year," TSH said.
Revenue was higher at RM246.95 million from RM220.48 million.
In 3QFY14, TSH said oil palm fresh fruit brunch (FFB) production grew 26% to 163,646 tonnes from 129,778 tonnes a year earlier. FFB output rose as more young plantation areas matured and achieved higher yields.
"Despite lower average crude palm oil (CPO) price of RM2,170 compared to RM2,239 in 3QFY13, the segment operating profit surged 18% mainly resulting from the higher FFB production and on-going initiatives to improve unit production cost and operational efficiencies," TSH said.
Year-to-date, 9MFY14 net profit was lower at RM111.83 million versus RM120.45 million a year earlier.
Revenue, however, expanded to RM835.87 million from RM740.32 million.
Going forward, TSH remains optimistic on long-term prospects of the palm oil industry. The firm said it would continue to focus on planting programme in Indonesia while exploring expansion of its plantation land in Malaysia.
With FFB production expected to increase this year, the company expects to achieve improved profit in the coming quarters.
At about 4pm, TSH shares fell four sen or 2% RM2.21 with 293,500 shares done. At the current price, TSH has a market capitalisation of RM3 billion.