18/08/2012 (The Star) - Ta Ann Holdings Bhd's earnings fell 73.7% to RM13.32mil in the second quarter ended June 30, 2012 from RM50.73mil a year ago due to lower sales by oil palm and timber segments, but it expected the second half to be better.

It said on Friday revenue declined 32.5% to RM187.98mil from RM278.51mil. Earnings per share were 3.59 sen compared with 13.69 sen.

"Both oil palm and timber segments registered lower sales volume with the exception of export log section. Fresh fruit bunch (FFB) production was lower in the quarter under review due to delay in commencement of peak crop season which in 2011 began in May/ June," it said.

Ta Ann said as for its plywood operations, the mills reduced production in the quarter by 30% in view of the weak plywood market. Sales volume of FFB, crude palm oil (CPO) and plywood products fell by 11%, 24% and 35% respectively though export log sales volume was 8% higher.

"Selling prices were all significantly lower with FFB, CPO, plywood products and export logs recording 8%, 7%, 15% and 23% lower average selling prices respectively," it said.

In the first half, its earnings fell 68% to RM24.75mil from RM77.29mil while revenue was down 23.3% to RM352.55mil from RM459.94mil.

"For the second half year of 2012, a rise in FFB production is expected in the peak crop season. With the projected sustainability of CPO price at RM3,000 a tonne level, increasing revenue contribution is anticipated from the oil palm segment," it said.

As for its timber segment, it said the market trend would hinge on the plywood market. It expected demand for export logs from the main buyer country, India, to be sustained.

Ta Ann said any increase in demand for plywood products, in particular, arising from the township reconstruction in Japan, would improve the market price of timber and timber products in general and plywood products specifically.