TSH Resources’ 3Q earnings soar almost six times on land disposal gain

TheEdge Wed, Nov 23, 2022 11:23pm - 1 year View Original


KUALA LUMPUR (Nov 23): TSH Resources Bhd registered a net profit of RM258.43 million in the third quarter ended Sept 30, 2022 (3QFY2022) — soaring by almost six times from RM45.08 million recorded in 3QFY2021.

The jump in earnings were however due to a one-off event — a gain of RM301.3 million from the disposal of land by PT Bulungan Citra Agro Persada (BCAP), according to TSH’s financial results announcement on Bursa Malaysia.

Without the gain on disposal of land, TSH’s core profits before taxation of RM34 million was 50% lower than the RM68.25 million it recorded in 3QFY2021, mainly due to fair value loss on forest planting expenditure of RM34.5 million under the 'Others' segment.

Nevertheless, TSH declared a single-tier interim dividend of eight sen per share, with an ex-date of Dec 7, payable on Dec 21.

During the quarter, TSH’s revenue declined 15.02% to RM262.65 million compared with RM309.07 million previously due to lower average selling price of crude palm oil (CPO) and palm kernel.

However, due to the gain on disposal, its profit before tax for 3QFY2022 surged 348% to RM294.44 million from RM65.69 million.

Its net profit increased 290% to RM412.24 million in the nine months ended Sept 30, against RM105.58 million the prior year boosted by the gain on disposal of land by BCAP and previously completed disposals of Ladang Ong Yah Ho, Ladang Gomantong and Lahad Datu Palm Oil Mill of RM386.3 million.

On a nine-month period ended Sept 30, 2022 basis, TSH’s revenue was up by 19.04% to RM1.02 billion from RM860.57 million. The group’s core profit increased 8% to RM199.5 million compared with 9M2021, despite the fair value loss on forest planting expenditure.

“Taking into account the gain on disposal of land by BCAP and previously completed disposals of Ladang Ong Yah Ho, Ladang Gomantong and Lahad Datu Palm Oil Mill of RM386.3 million, partially offset by impairment of PPR of RM56.1 million and higher losses on foreign exchange, PBT for 9M2022 increased significantly to RM490.8 million from RM169.4 million registered for 9M2021,” the group stated.

Moving forward, TSH said it is optimistic of achieving satisfactory performance for the year 2022, despite concerns over global economic slowdown, strict Covid-19 measures in major importer China and high energy prices.

Besides, restrained hectarage growth in oil palm planting over the last few years due to Roundtable on Sustainable Palm Oil (RSPO) regulations and Indonesian Government’s moratorium on deforestation will have an impact over the global palm oil supply, it said.

“Global population and per capita income growth as well as the many health qualities of palm oil are expected to drive greater demand for palm products. This augurs well for the group as the palm products segment will remain the core contributor to the group profit,” it added.

TSH Resources' share price was flat at RM1.07 at the closing bell on Wednesday, for a market capitalisation of RM1.48 billion.

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