2/09/05 SIBU, (Bernama) -- Fully integrated timber producer Jaya TiasaHoldings Berhad is eyeing oil palm as its future income contributor andstrategic growth area.

The group has undertaken significant development activities and capitalexpenditures for oil palm in its financial year ended April 30, 2005.

In his annual report, board chairman General (Retired) Tan Sri AbdulRahman Abdul Hamid said the group had on July 27, 2004, entered into ajoint venture agreement with Wealth Houses Development Sdn Bhd to developand cultivate 6,000 hectares into oil palm plantations at Pulau Bruit inDaro in the Mukah Division.

On Jan 6 this year, the group acquired the entire issued and paid-upcapital of Eastern Eden Sdn Bhd and Poh Zhen Sdn Bhd which owned 10,000and 5,000 hectares respectively in the same area.

"With the new joint venture and acquisitions, our total oil palmplantation land bank has now increased from 62,480 hectares to 83,480hectares," Abdul Rahman said.

He said development works and planting were ongoing at five plantationsites with a total land area of 38,430 hectares, all scattered in thestate's central region.

"The total planted area as at the end of the financial year was 5,400hectares with 900 hectares expected to mature in the second half of thecurrent financial year," he added.

Abdul Rahman said the group would continue to speed up its plantationdevelopment and planting in the next few years with the aim of achieving asizeable hectarage of matured plantations in the medium term.

He said this would in due course contribute positively to the earnings andstrategic growth of the group.

On the group's financial performance for the year under review, AbdulRahman said revenue rose to RM664.9 million from RM488.8 million recordedin the previous financial year, representing an increase of RM176.1million or 36 percent.

Profit before tax grew by RM 21.7 million or 46 percent to RM69.3 millionfrom RM47.6 million previously, he said.

He added that this was despite a one-off loss of RM16.6 million incurredon the disposal of a Brazilian subsidiary in January this year.

However, Abdul Rahman said the group's profit after tax declined by RM8.8million or 19 percent to RM36.7 million from the RM45.5 million posted inthe last financial year.

"This translated into lower earnings per share of 14 sen for the yearunder review as compared to 17.3 sen previously," he said.

Abdul Rahman said shareholders' fund had increased from RM833.3 million asat the end of the previous financial year to RM873.6 million.

The net tangible assets per share of the group now stood at RM2.82 ascompared to RM2.81 previously, he said.

Abdul Rahman said the group's plywood division which contributed 52percent to the total revenue was still its top earner.

"The average selling price of plywood had improved by 14 percent while itsexport volume increased by 12 percent as against previous year figures,"he said.

He added that the United States remained the group's major export market,accounting for 47 percent of its total plywood export value, followed bythe Middle East at 18 percent and South Korea at 17 percent.

Abdul Rahman said the group's wholly owned subsidiary, Jaya Tiasa PlywoodSdn Bhd, has been awarded the CE Marketing Certificate by BM TRADACertification Ltd for its hardwood plywood for structural or external use.

"This will open more markets for us in the European economic areas," hesaid.

On the group's logging division. Abdul Rahman said it contributed 36percent to the total revenue.

On the group's reforestation programme, he said it covered an area of235,795 hectares.

For the financial year ended April 30, 2005, the board recommended a finaldividend of three percent less income tax of 28 percent.

On the group's performance in the current financial year, Abdul Rahman itexpected to deliver satisfactory results although the "visibility of theglobal economic outlook continues to be clouded by the surging crude oilprices".

"However, in the foreseeable near term, emerging economies such as Chinaand India are expected to continue to provide the much-needed impetus tothe growth of the world economy," he said.

The group will hold its annual general meeting at its main office here onSept 29, 2005.

-- BERNAMA