TH Plan­ta­tions reaps ben­e­fit of higher prices

> Third quar­ter net profit surges more than three­fold to RM19.18m

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: TH Plan­ta­tions Bhd (THP) re­ported a more than three­fold jump in net profit to RM19.18 mil­lion for the third quar­ter ended Sept 30, 2016, com­pared with the same pe­riod last year, at­trib­uted mainly to higher rev­enue, driven by bet­ter av­er­age sale prices.

It reaped RM170.31 mil­lion rev­enue in the quar­ter, a 28% jump from RM133.49 mil­lion a year ago, boosted mainly by higher av­er­age re­alised prices of crude palm oil (CPO), palm ker­nel and fresh fruit bunches (FFB).

On av­er­age, the group’s trad­ing price for CPO was RM2,559 per tonne, 23% higher than in the same pe­riod last year. Palm ker­nel traded at about RM2,456 per tonne, al­most 85% higher than the com­par­a­tive quar­ter last year. The group’s av­er­age re­alised CPO sell­ing price was RM2,451 per tonne while its av­er­age re­alised palm ker­nel sell­ing price was RM2,405 per tonne, in­creas­ing 20% and 80% re­spec­tively. FFB pro­duc­tion in 3Q16 dropped by 7% com­pared with last year to 234,005 tonnes, while palm ker­nel pro­duc­tion fell by 9% to 11,029 tonnes.

THP CEO and ex­ec­u­tive di­rec­tor Datuk Seri Zainal Azwar Zainal Amin­ud­din said com­mod­ity prices con­tin­ued to trade at en­cour­ag­ing lev­els, sup­ported by lower pro­duc­tion across the in­dus­try, de­plet­ing stocks, weaker cur­ren­cies and pos­si­bly higher biodiesel man­dates. Higher CPO and palm ker­nel prices more than off­set the ef­fects of lower pro­duc­tion and yields, which con­tinue to suf­fer from the lagged ef­fect of El Nino, the weather phe­non­menon.

“Nev­er­the­less, we are en­cour­aged to see sig­nif­i­cant im­prove­ment in pro­duc­tion on a quar­ter to quar­ter ba­sis, with 3Q16 FFB pro­duc­tion grow­ing by 31% com­pared to the pre­vi­ous quar­ter this year. This marked im­prove­ment may be an in­di­ca­tion of stronger re­cov­ery in pro­duc­tion, and we hope that it will con­tinue to re­cover in the com­ing quar­ters,” said Zainal An­war.

For the first nine months of the year ended Sept 30, 2016, the group re­ported a 9.4% higher net profit of RM19.61 mil­lion from RM17.92 mil­lion a year ago and rev­enue of RM392.23 mil­lion com­pared with RM325.98 mil­lion in the pre­vi­ous cor­re­spond­ing pe­riod.

“We have re­mained re­silient amid the chal­lenges faced by the in­dus­try. Lower pro­duc­tion hit us hard, par­tic­u­larly in the first quar­ter of this year, but we are pleased to re­port that our over­all pro­duc­tion to date has not been as sig­nif­i­cantly im­pacted as com­pared to other in­dus­try play­ers.

“This is a re­sult of our growth strat­egy, from which we see a steady stream of new ar­eas com­ing into ma­tu­rity through­out these few years ... of course, in the ini­tial stages of ma­tu­rity the yields of these ar­eas are in­evitably lower, but their con­tri­bu­tion has helped us take ad­van­tage of the high com­mod­ity price en­vi­ron­ment and boost rev­enues,” Zainal An­war said.

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