Plantations division the star performer for Ta Ann

KUALA LUMPUR: Local player Ta Ann Holdings Bhd (Ta Ann) saw its core net income of RM68.9 million for the first half of 2017 (1H17) coming in within expectations, with its plantations segment labelled as the ‘star performer’ by analysts.

To note, its core net income for 1H17 jumped 54 per cent year on year (y-o-y) as its profit before tax (PBT) for its plantation division surged 279 per cent y-o-y.

MIDF Amanah Investment Bank Bhd (MIDF Research) saw that Ta Ann’s plantation division improved as it benefited from better crude palm oil (CPO) price, which grew by 19 per cent y-o-y to RM2,826 per metric tonne, and higher production of fresh fruit bunch, which grew 14 per cent yo-y to 323,932 metric tonnes.

“Plantation division is the biggest earnings contributor with PBT of RM98.9 million – making up 86 per cent of the group’s profits,” it highlighted.

“Although Ta Ann’s CNI of RM68.9 million made up 60 and 55 per cent of ours and consensus full year earnings estimate, we are expecting weaker performance from timber segment in 2HFY17,” it added.

“We believe that the reduction in export quota to 20 per cent from 30 previously will affect the timber division from 3QFY17 onwards.”

Another research house, AmInvestment Bank Bhd (AmInvestment Bank) remained positive on Ta Ann’s earnings prospects.