KUALA LUMPUR (May 20): Palm oil planter TSH Resources Bhd saw its net profit plunge 87.7% to RM6.44 million or 0.48 sen a share for the first quarter ended March 31, 2015 (1QFY15) from RM52.17 million or 3.88 sen a share a year ago, on lower crude palm oil (CPO) price, seasonal low crop and exchanges differences.

Revenue fell 28.2% to RM206.03 million from RM287.12 million in 1QFY14.

In a filing with Bursa Malaysia today, TSH said that its crop production for the quarter was 8.6% lower year-on-year. It fell to 143,258 tonnes from 156,742 tonnes in 1QFY14.

CPO price was also weaker at RM2,201 per tonne in 1QFY15 versus RM2,543 per tonne in 1QFY14.

“Generally, fresh fruit bunch (FFB) yield during 1QFY15 was low due to cyclical low crop yielding period but was also affected by the hangover of long term stress from 2014 drought in Indonesia, Sabah and Sarawak and exacerbated by the dry weather during early 2015 in Sabah and Sarawak,” said TSH.

On its prospects going forward, TSH expects CPO prices to continue trading at around RM2,100 per tonne level in 2015 due to ample supply, declining prices of competitive edible oil and Indonesia’s biodiesel policy.

The group remains “optimistic” on the long term prospect of the palm oil industry.

It added that it will continue its oil palm planting programme in Indonesia and further expand its plantation land in Malaysia.

“While FFB production can be expected to increase for the full year of 2015, the board is nonetheless mindful of the longer term impact of unfavourable weather on FFB yield in 2015 as seen in the crop production for 1QFY15,” it said.

TSH (fundamental: 0.45; valuation: 0.5) shares closed at RM2.25 today, down 1 sen. This gives it a market capitalisation of RM3.05 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.)