MARKET DEVELOPMENT
TH Plantations Expects CPO Production To Reach 948,000 Tonnes
TH Plantations Expects CPO Production To Reach 948,000 Tonnes
21/05/2015 (Bernama) - TH Plantations Bhd expects its crude palm oil (CPO) production to reach 948,000 tonnes this year compared with 788,000 tonnes in 2014, driven by maturing plantations.
Chief executive officer Datuk Zainal Azwar Aminuddin said 51 per cent of the company's 60,000 hectares (ha) of plantations comprised young trees.
"With more plantations coming into maturity in the near future, it promises a steady revenue growth in the coming years," he told reporters after the company's annual general meeting here Wednesday.
He added that the young plantation areas would be gradually entering their prime mature period, starting from this year until 2020, adding to the existing 24 per cent of matured areas.
Zainal Azwar said TH Plantations had gone through a growth phase in the last three years which saw its landbank grow to 106,000ha currently from 15,000ha during its listing in 2006.
He said the company had also embarked on an aggressive replanting programme whereby 2,400ha of old palm trees of over 25 years old was replanted in the last six years.
Despite its extensive growth programme, he said the company's net gearing remained within the prudent limit of 0.8 times with assets valued at RM3.5 billion.
Going forward, he said TH Plantations would focus on consolidating its plantations including planting up the remaining greenfield areas and churning the best fresh fruit bunches production from its plantations.
Currently, greenfield areas constitute about 18 per cent of the company's total landbank.
He said the company would also start to explore the possibility of exporting its CPO from Sarawak to countries such as China, India and the Middle East.
On the CPO price, Zainal Azwar anticipates the price to bounce to RM2,400 a tonne in the second half year, from between RM2,100 and RM2,200 a tonne currently, driven by better offtake due festive celebrations, returning demand from China and India and no added pressure from competing oils such as soybean oil.
Meanwhile, on the first-quarter performance, he hinted that the results would remain subdued due to the challenging operating conditions in the palm oil sector.
"Todate, the industry is already observing subdued production and commodity prices are still lacklustre," he said.
To mitigate this, he said TH Plantations would continue to carry efficiency and productivity initiatives while optimising cost structure to be on par with industry best practices.
Nevertheless, he said the company was aiming for a five per cent revenue growth this year.
Last year, TH Plantations' revenue grew four per cent to RM489 million from RM470 million in 2013 while earnings before interest, tax, depreciation and amortisation was almost flat at RM170 million from RM171 million the year before.
Chief executive officer Datuk Zainal Azwar Aminuddin said 51 per cent of the company's 60,000 hectares (ha) of plantations comprised young trees.
"With more plantations coming into maturity in the near future, it promises a steady revenue growth in the coming years," he told reporters after the company's annual general meeting here Wednesday.
He added that the young plantation areas would be gradually entering their prime mature period, starting from this year until 2020, adding to the existing 24 per cent of matured areas.
Zainal Azwar said TH Plantations had gone through a growth phase in the last three years which saw its landbank grow to 106,000ha currently from 15,000ha during its listing in 2006.
He said the company had also embarked on an aggressive replanting programme whereby 2,400ha of old palm trees of over 25 years old was replanted in the last six years.
Despite its extensive growth programme, he said the company's net gearing remained within the prudent limit of 0.8 times with assets valued at RM3.5 billion.
Going forward, he said TH Plantations would focus on consolidating its plantations including planting up the remaining greenfield areas and churning the best fresh fruit bunches production from its plantations.
Currently, greenfield areas constitute about 18 per cent of the company's total landbank.
He said the company would also start to explore the possibility of exporting its CPO from Sarawak to countries such as China, India and the Middle East.
On the CPO price, Zainal Azwar anticipates the price to bounce to RM2,400 a tonne in the second half year, from between RM2,100 and RM2,200 a tonne currently, driven by better offtake due festive celebrations, returning demand from China and India and no added pressure from competing oils such as soybean oil.
Meanwhile, on the first-quarter performance, he hinted that the results would remain subdued due to the challenging operating conditions in the palm oil sector.
"Todate, the industry is already observing subdued production and commodity prices are still lacklustre," he said.
To mitigate this, he said TH Plantations would continue to carry efficiency and productivity initiatives while optimising cost structure to be on par with industry best practices.
Nevertheless, he said the company was aiming for a five per cent revenue growth this year.
Last year, TH Plantations' revenue grew four per cent to RM489 million from RM470 million in 2013 while earnings before interest, tax, depreciation and amortisation was almost flat at RM170 million from RM171 million the year before.