TSH net profit soars to RM258.43 mln, but analysts still sceptical
TSH Resources Bhd (TSH) net profit soared to RM258.43 million in the third quarter ended Sept 30, 2022 (3Q22) compared with RM45.08 million in the same quarter a year ago.
On a nine-month basis ended Sept 30, 2022 (9MFY22), it recorded a net profit of RM412.24 million in comparison with RM105.58 million for the same period previously.
“The sharp improvement is primarily contributed by earnings from the palm products segment and gain on disposal of assets partially offset by impairment of some assets and foreign exchange losses,” it said in a filing with Bursa Malaysia.
Meanwhile, revenue for the third quarter under review fell by 15 per cent to RM262.65 million versus RM309.07 million a year ago, as a result of lower average crude palm oil (CPO) and palm kernel (PK) prices.
“Conversely, revenue for the nine-month period ended September 30, 2022, increased by 19 per cent to RM1.02 billion from RM860.57 million achieved for the corresponding period last year due to higher average CPO and PK prices,” it said.
TSH said the profit for the palm products segment for 3Q22 was impacted by the increase in Indonesia’s export levy and duty on CPO, whereas the profit recorded for 9MFY22 was achieved despite the higher export levy and duty.
The company has also recognised sales proceeds of RM428.8 million and a gain on disposal of RM301.4 million arising from the completion of the disposal of 7,817.37 hectares of certificated land by a subsidiary, PT Bulungan Citra Agro Persada.
On prospects, it remains optimistic about the long-term prospect of the palm oil industry.
“Restrained hectarage growth in oil palm planting over the last few years due to the RSPO (Roundtable on Sustainable Palm Oil) regulations and the Indonesian government’s moratorium on deforestation will have an impact on the global palm oil supply.
“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,” it said.
MIDF Amanah Investment Bhd (MIDF Research) saw that TSH’s 9QFY22 core earnings posted RM168.4 million which came in below its expectations at 41 per cent of full-year estimate.
“However, revenue was at a record high of RM1 billion yearto-date owing to higher average CPO and PK prices.
“TSH’s plantation segment profit margin remained stable at 25 per cent during the quarter, aided by productive FFB production of 263,838 metric tonnes (MT) despite lower CPO ASP of RM3,234 per MT and PK of RM1,849 per MT realised.