MARKET DEVELOPMENT
Ta Ann Posts Strong Earnings for the First Half of 2014
Ta Ann Posts Strong Earnings for the First Half of 2014
02/09/2014 (Borneo Post) - Ta Ann Holdings Bhd (Ta Ann) earnings for the first half of 2014 (1H14) soared 107 per cent year-on-year (y-o-y) to RM58.43 million compared with RM28.23 million in 1H13.
The company in a filing to Bursa Malaysia recently said its net profit for the second quarter of 2014 (2Q14) also increased 23 per cent y-o-y to RM29.77 million from RM24.20 million in 2Q13.
At the same time, Ta Ann’s revenue for 2Q14 also grew 23 per cent y-o-y to RM245.77 million against RM199.93 million generated in 2Q13.
For 1H14, the company said its revenue gained 31 per cent y-o-y to RM457.58 million versus RM350.21 million achieved in 1H13.
In its notes accompanying the release of the results, higher average selling prices attributed to logs export which increased by three per cent; plywood (seven per cent); oil palm fresh fruit bunches (FFB) (23 per cent); and crude palm oil (CPO) (17 per cent) have contributed to higher revenue.
Correspondingly, its sales volume of logs increased by 30 per cent, FFB (nine per cent); and CPO by 65 per cent.
Nonetheless, Ta Ann said its plywood sales volume was 18 per cent lower in 2Q14 compared with 2Q13.
In particular, Ta Ann’s operational performance for 2Q14 has improved considerably including the first tranche compensation payment received from the Australian government, which have a net income effect of RM21.48 million.
On a quarterly basis, Ta Ann’s revenue increased by 16 per cent quarter-on-quarter (q-o-q) to RM245.77 million in 2Q14 compared with RM211.82 million in 1Q14.
The company attributed the higher revenue received to the significantly higher CPO output with the commissioning of a new CPO mill.
Meanwhile, for the second half, continuing improvement in the performance of both timber and palm oil sectors are anticipated in the second half of 2014.
Ta Ann outlined that in the log market, the selling prices of Keruing and mixed light hardwood (MLH) logs have risen by US$90 per cubic meter and US$20 per cubic meter respectively following a log export ban imposed by Myanmar in April.
Hence, Ta Ann believed that stronger log demand and price are expected to be sustained in the second half of this year.
On another note, Ta Ann foresees that plywood demand is expected to ease in the third quarter after the rush by the Japanese buying in the first half of the year to beat the sales tax increase.
Nonetheless, the company said buying of plywood is anticipated to resume in the fourth quarter with an uptrend as a result of more infrastructure and constrcution projects.
As for the palm oil sector, Ta Ann noted that the peak crop season will increase its FFB and CPO production, thus raising the division’s contribution to the group’s revenue.
In spite of that, Ta Ann pointed out that the movement of the CPO price will determine the oil palm segment’s contribution to the group’s profit.
Hence, Ta Ann is optimistic that its financial performance in 2H14 will be comparable with the financial results achieved in 1H14.
The company in a filing to Bursa Malaysia recently said its net profit for the second quarter of 2014 (2Q14) also increased 23 per cent y-o-y to RM29.77 million from RM24.20 million in 2Q13.
At the same time, Ta Ann’s revenue for 2Q14 also grew 23 per cent y-o-y to RM245.77 million against RM199.93 million generated in 2Q13.
For 1H14, the company said its revenue gained 31 per cent y-o-y to RM457.58 million versus RM350.21 million achieved in 1H13.
In its notes accompanying the release of the results, higher average selling prices attributed to logs export which increased by three per cent; plywood (seven per cent); oil palm fresh fruit bunches (FFB) (23 per cent); and crude palm oil (CPO) (17 per cent) have contributed to higher revenue.
Correspondingly, its sales volume of logs increased by 30 per cent, FFB (nine per cent); and CPO by 65 per cent.
Nonetheless, Ta Ann said its plywood sales volume was 18 per cent lower in 2Q14 compared with 2Q13.
In particular, Ta Ann’s operational performance for 2Q14 has improved considerably including the first tranche compensation payment received from the Australian government, which have a net income effect of RM21.48 million.
On a quarterly basis, Ta Ann’s revenue increased by 16 per cent quarter-on-quarter (q-o-q) to RM245.77 million in 2Q14 compared with RM211.82 million in 1Q14.
The company attributed the higher revenue received to the significantly higher CPO output with the commissioning of a new CPO mill.
Meanwhile, for the second half, continuing improvement in the performance of both timber and palm oil sectors are anticipated in the second half of 2014.
Ta Ann outlined that in the log market, the selling prices of Keruing and mixed light hardwood (MLH) logs have risen by US$90 per cubic meter and US$20 per cubic meter respectively following a log export ban imposed by Myanmar in April.
Hence, Ta Ann believed that stronger log demand and price are expected to be sustained in the second half of this year.
On another note, Ta Ann foresees that plywood demand is expected to ease in the third quarter after the rush by the Japanese buying in the first half of the year to beat the sales tax increase.
Nonetheless, the company said buying of plywood is anticipated to resume in the fourth quarter with an uptrend as a result of more infrastructure and constrcution projects.
As for the palm oil sector, Ta Ann noted that the peak crop season will increase its FFB and CPO production, thus raising the division’s contribution to the group’s revenue.
In spite of that, Ta Ann pointed out that the movement of the CPO price will determine the oil palm segment’s contribution to the group’s profit.
Hence, Ta Ann is optimistic that its financial performance in 2H14 will be comparable with the financial results achieved in 1H14.