KUALA LUMPUR (Feb 27): Sabah-based plantation firm TSH Resources Bhd's net profit surged 76.8% to RM18.41 million in the fourth quarter ended Dec 31, 2019 (4QFY19), from RM10.41 million a year ago, buoyed by higher oil palm production growth and favourable crude palm oil (CPO) selling prices.
This resulted in a higher earnings per share of 1.33 sen for 4QFY19 compared with 0.75 sen for 4QFY18.
Revenue for the quarter rose 9% to RM241.49 million from RM221.63 million in 4QFY18, mainly thanks to higher average CPO selling price during the quarter under review.
TSH also proposed a first and final dividend of one sen per share for the full year ended Dec 31, 2019 (FY19), which is subject to shareholders' approval at the forthcoming annual general meeting.
The strong quarterly performance lifted the group's net profit for the full year FY19 by 8.8% to RM44.03 million from RM40.46 million in the previous year. However, revenue came in 7.4% lower at RM838.95 million compared with RM906.44 million in FY18, impacted by the lower average CPO and palm kernel (PK) prices during the year.
In a bourse filing today, TSH said it remains optimistic on the long-term prospect of the palm oil industry, premised on higher per capita income globally, population growth and health benefits of palm oil.
It said the management will continue to focus on productivity and efficiency improvement to reduce its unit cost of production, and anticipates its performance for FY20 to be satisfactory if CPO price continues to hover at current levels.
In a separate statement, TSH said its plantations in Indonesia produced 21% fresh fruit bunches (FFB) growth per year on average over the last three years (2017-2019), which is a testimony of consistency FFB growth.
“TSH achieved FFB production of 893,738 tonnes for FY19. FFB production increased 17% in 4QFY19 to 240,590 tonnes from 4Q18.
“Large areas of TSH’s oil palm plantation comprise young trees, with their growing maturity profile and expanding harvestable areas that should continue to drive good FFB growth next year and thereafter. High FFB growth in the long run will mitigate financial impacts of the volatility of CPO price especially during low price period,” it added.
Shares in TSH closed up two sen or 1.7% at RM1.23 today, bringing a market capitalisation of RM1.7 billion.